Comment by Miraste

>you need to keep your heads, hands, and body out of the way of it.

I've seen systems like this that use multiple projectors from different angles, calibrated for the space and the angle. They're very effective at preventing occlusion, and it takes fewer than you'd think (also see Valve's Lighthouse tech for motion tracking).

Unfortunately, doing that is expensive, big, and requires recalibrating whenever it's moved.