The Apple Pencil also can’t be used to navigate the UI.
The Mac’s keyboard and trackpad, of course, works reliably. And the only way to click or tap on elements is by using the Apple Pencil or a mouse that’s connected to the iPad (which brings up a cursor on the screen). So when you tap on the screen with a finger or you try to scroll with a finger, nothing happens. The UI elements in Mac was quite small for this to work reliably. If you were hoping that Sidecar would turn the Mac into an iPad where you’ll be able to use your fingers to tap on the screen and move around, alas, this is not it. While the touch UI does work, it’s not intuitive. You can use touch, Apple Pencil, and a mouse to control the Mac display on your iPad.
You’ll see a sidebar with controls and shortcuts, along with a virtual Touch Bar at the bottom of the screen. Once Sidecar is enabled, the iPad works as more than just a monitor.