I'm trying to understand the point you're making here but don't really get it. The OS is just software, in most circumstances. Most modern OS require at least one binary blob that has to be sent to some hardware device. This is mostly because the the device manufacturer didn't want to include NVRAM and at the end of the day is usually just software as well.
their point is that lots of things everyone thinks of as "OS" things like "tcp" and "doing file IO" can just be done in user space by some new program without the processes that make use of these facilities knowing or caring.
The majority of any OS lives in user space though. Intercepting syscalls is also not that weird of an idea, that's how tools like strace works. Building out sufficient kernel functionality without needing to forward calls to the kernel is definitely impressive though.
What do you mean by that? There's a notion of an "operating system" that encompasses both the kernel and all the userland tools (in this sense, each Linux distribution is an "OS"), and there's a more common notion of an OS that is just the kernel and any userland services required for the kernel to function; the latter is the more common definition.