It's not just hands, either. Agarawala says Spatial uses the HoloLens 2's eye tracking to accurately reflect user eye movements in their avatars in virtual space. The eye tracking is good enough to let avatars "convey subtle levels of user emotion," Agarawala says.
This mixed-reality/collaboration endeavor is a big push for Microsoft. The company is adding a "Spatial Rooms" tab to its (Slack-like) Teams collaboration app. In Spatial Rooms, people can work on projects, customize the room, and come back to continue the work later. The meetings are also more inclusive now, because Spatial is enabling people to join a meeting via the web or smartphone.
The graphics in the Spatial demo at Build weren't perfect, but they were a big improvement over what I saw at last year's presentation. The holograms were still a little rough (Spatial represents people with holographic avatars, not the cartoon-like avatars used in Facebook Spaces). All the same, Spatial is pushing hard on the technology to get it to the point of being useful, if not totally lifelike.