Not really sure that follows. For a 20ft room, it only takes a wifi signal 20 nanoseconds to cross it, and an ethernet signal around 30 nanoseconds. Your room would need to be over a hundred miles wide to add a millisecond of delay, disregarding stuff like repeaters.
I think the same room is to have good signal strength to minimize dropped/repeated packets. The transmission time won't be noticeable but the signal to noise ratio may decrease fairly quickly with distance and obstacles.
I think the lag is subjective. I find it noticeable compared to wired - however I'm fairly latency sensitive. I think if you've never played Alyx over wired, you may not notice the lag in VirtualDesktop. Playing something timing sensitive like Beat Saber it's very apparent and basically unplayable.
You also need ideal wifi conditions. I found the best option is to have a dedicated wifi card on your desktop and just make it into a dedicated AP for the headset. Without this I'd get occasional glitches/pauses which is motion sickness inducing.
Even with these drawbacks, I'd say VirtualDesktop is pretty amazing and shows the potential of what's possible. The image quality is far better than the wired Oculus link. The software is also far less buggy than Oculus link - it has nice, working integration with SteamVR that just works out of the box. I wonder how a single person could write a better implementation than Facebook/Oculus engineers, but there you go. And when it works, under ideal wifi conditions, it's really nice not to have a wire tether.
I imagine the future of VR will have dedicated wireless base stations. Nintendo was doing this almost 10 years ago with the WiiU - much lower bandwidth, but virtually lagless and resilient even in noisy RF environments.
