In practice, when latency is small enough (on the ~1ms level, which is trivial to achieve using even pretty cheap parts) it's imperceptible.

I sometimes develop control loops for prototype systems which use a motor to emulate a combination of spring + friction damper, and even though I know that my code only runs every 1ms, it's really remarkable how much it feels like a real continuous analogue system.

Another good example is power steering, which uses a motor to remove resistance instead of add it. If I understand it correctly, it senses you applying torque to the steering column and adds proportional amounts of boost - but because it happens so fast, it just feels like the steering is magically lighter.