I came across a Twitter post by Matt Stark and wanted to understand the effect from my own perspective. So I set out on recreating it inside unreal.
The parent class exposes variables for a designer to manipulate such as, if the object should calculate physics or if the static mesh should be rebuilt procedurally or not.
The player rasies a photograph and a box trace is sent out to invisibly duplicate the hit objects and to then desaturate and cut them along the box's edges.
When placing objects, a box trace is sent out to cut the enviornment and remove the chuncks that were within. Then the previously duplecated objects are unparented and unhidden.
Expanding upon the current mechanic, I added a door child class which retains its functionality regardless of being cut up.
Currently the duplicate mesh does not apply texture scaling acording to its original.