It's like a tech demo, a preview of the future. Give it 5 years and it will be super refined and probably the future of low cost animation for kids TV shows and stuff. Then even further, like how no one animates without a computer now, no one will animate without AI assistance.
Idk about the future of animation. It would require look-alike actors. Wouldn't it be easier to use already available tech to transfer gestures and facial expressions to cartoon models?
As far as I can tell, it really depends on the intensity of the "slider".
When the insensity of the style transfer is pushed mostly to the right (high), it just seems like Pixar or cartoons. Nothing uncanny whatsoever.
But when they show is about a quarter of the way to the right... it's utter nightmare fuel, like plastic surgery taken way too far. The worst kind of uncanny valley, so I definitely agree with you there.