I have a virtual pinball cab with two (and soon) three displays. Wayland really makes life difficult here because the software needs to always put the playfield on one display, the backglass on another, and the "dot matrix display" window on a third. That's a big no-no with Wayland. Fortunately KDE has window rules as a workaround. Sway and Hyprland allow similar rules. Mutter on Gnome has no equivalent.

I'm guessing this would mess up other games as well, like multi-screen flight simulators or driving games. It would be really nice if user-trusted apps could be granted permissions on an app-by-app basis to allow absolute placement of windows for these cases instead of making us jump through hoops.

Yes, exactly. This security paranoia makes the devs' lives much more complicated. I have seen many apps turning off advanced features, such as screen color pickers. Automatation tools can be broken. Apps cant know their window positions, etc. You can see countless dev rants about Wayland and how it's generally unpleasant experience to work with.