This is already done in Valorant at least (and presumably other games I'm not as familiar with). Unfortunately you are strongly limited by network latency. Imagine you're standing up against a wall next to a door. You expect if you step 1 foot sideways to instantly see the entire room and everyone within it. Hence your client already has to know everyone's locations in the room or you will get pop-in. You can limit people's ability to get truly implausible free information, but pretty much any-time someone is rounding a corner there is an unavoidable period of game-breaking free information you have to give the client.

If you look at the bottom gif in this post you can see what a huge advantage a wall-hack still is: https://technology.riotgames.com/news/demolishing-wallhacks-...