Finally got around to looking at this, and… we've basically had this solved in Ubuntu Touch for 6 years already. Long press on space bar to switch to cursor mode, which turns the keyboard into a rudimentary touch pad for moving the cursor and selecting text. It's gained a few features over the years, and is part of maliit-keyboard under @kde Plasma Mobile now too.

https://mastodon.social/@scottjenson@social.coop/111108791774428342

Here's a couple shots of the keyboard in this mode under Plasma Mobile on a @PINE64 #PinePhone as well.