It’s a neat idea. I think I’d prefer the effect if it transitioned more gradually rather than quickly changing to “split mode”.
For the right kind of game I could definitely see this working. In fact you could make a whole game based around this kind of effect, with space being squashed and stretched in different areas etc.
I think it's challenging to transition slowly. You're close enough to need no split, and then you're far apart and need to split, and the contents of the split are determined by the distance.
In the video you can see that there’s a transition time, but it’s maybe more obvious in the second run that’s halfway through the video. The player tweens from being near the end of the screen to directly in the center of their slice. Just slowing down that transition alone would help a lot. I think instead of doing it with a specific tween time (which it seems to be doing now), that tween itself could be based on the distance as well, then you wouldn’t end up with the two “modes” feeling it currently has.
If it also allowed the players some more freedom to move within their slice after the split, and perhaps some level of zoom out before the split, it would end up being much more smooth and fluid.
For the right kind of game I could definitely see this working. In fact you could make a whole game based around this kind of effect, with space being squashed and stretched in different areas etc.