As noted by Richard, similar methods have been used by Franz Harary, Lance, and others. And even earlier by filmmakers like Chaplin, Keaton, and Lloyd, if we want to really draw comparisons. I think this particular arrangement most resembles Lance’s vanish of elephants in the Nevada desert on one of his tv specials, as it used a similar type of frame for the viewing perspective of the camera. But, yeah, this is classic movie technique applied to a magic trick.
The general public is much more savvy today about filmmaking, though they may be less aware of older, analog methods than they are of the current reliance upon all things computer generated. But I find it difficult to believe that anyone viewing this would think that the live viewers had the same perspective through the frame as the camera. Clearly, they did not, so it’s no surprise that none of their reactions ring true. It’s very easy to make ‘true’ statements like ‘What you’ll see is exactly what you would see if you were here with me’. Well, yeah, that’s true, but misleading. You can also claim that reactions are genuine by performing other magic (to warm up the crowd), recording reactions to that, and then intercutting them with the featured illusion. You’ll note that every time the video went to the audience there was a cut.
Getting back to perspective, again, people recognize that things change when perceived through a 2D medium. Anyone who’s ever blocked out the moon with their thumb understands that large objects become small at great distances.
I actually think this technique works better in the opposite direction: a large empty space, cloth is held up, car suddenly appears. It still uses perspective, and still uses the framing of the camera lens itself (without the need for some prop frame to view through), and is more surprising (again, on camera) because a large, physical object appears close to camera/audience, not far away.
But, I digress. In the end I’m not a big fan of these kinds of things presented as magic illusions, though I love these old-school techniques when used for cinematic illusions.