What was that old 'hologram' beat-em-up arcade game that did pretty much that?
It wasn't true 3D, of course; it used Pepper's Ghost, with the two players standing each side of a glass table looking down, to project the screen inside so that they saw their characters apparently standing on the surface of the table. The virtual screen always faced the player, so it looked weird as you walked around the table. (Both players saw the same screen.) And the screen was 2D, so your characters were flat.
But it was supposed to be incredibly convincing, nevertheless.
**Edit:** maybe Sega's Time Traveller? https://www.youtube.com/watch?v=fooFhfVUEI4 It's obviously similar technology, but I'm sure it's not the one I've seen.