Suspension sits between a wheel and the vehicle so the entire wheel is displaced over a bump which means it’s momentum exaggerates a shock.
Deforming the wheel means far less mass is moved and thus momentum. This is why we use air filled rubber tires in the first place, but they have real size limits. So, this could actually provide a smoother ride.
Probably not worth it for a bike, but someone with a broken bone for example can be extremely sensitive to shocks.
On a bike the total weight also includes the fork and parts of the suspension. Not sure about wheelchairs, but I suspect deforming the center of the wheel still easily cuts unsprung mass in half.
It's very important to reduce unsprung weight, which this does. Vehicle suspension is extremely complicated with a huge number of interrelated variables. It is always possible to make suspension work better, but normally at the price of being more complicated/more expensive. This is a clever idea that isn't that complicated.
Deforming the wheel means far less mass is moved and thus momentum. This is why we use air filled rubber tires in the first place, but they have real size limits. So, this could actually provide a smoother ride.
Probably not worth it for a bike, but someone with a broken bone for example can be extremely sensitive to shocks.