You have to pick out all the software (terminal, filemanager, text editor, whatever else a DE provides idk, but also things like a panel or launcher) yourself. Easy choices for that are KDE software (Konsole, Dolphin, Kate, etc), waybar, and rofi-wayland.
It also doesn't have a settings application (unless you use the very WIP and pretty outdated hyprset), all the configuration is in a file.
Sway is probably meh because it's a manual tiler. I use sway-autotiling in laptop mode and don't bother with switching the layout in tablet mode.
But generally the question should be "How does a stacking window manager even work with touch?" The answer is "like shit". Instead of having your windows automatically placed on the screen, you have to drag them around with your stylus.
I used to use KDE Bismuth (tiler for Plasma) and it was the best experience on a touchscreen I could imagine. I mainly used 2 tiling layouts. The usual Master+Stack for regular use and when watching lectures I used a layout which is almost stacking but makes the windows slightly smaller than full screen, so you can grab the window on the bottom easily. I had a keybind which reduced the opacity of a window making it see-through. That way I could have my lecture over almost the full screen while still being able to write over almost the entire screen.
Plasma also has the option to do something when you drag from a specific screen edge. I used that to launch the app launcher, to select workspaces and lock the screen.
Definitely gnome wayland. I have tried plasma wayland but it didn't work as well (gnome apps seem to be more touch-friendly than qt ones) and there's no built-in virtual keyboard. I also tried a custom setup with sway, wofi, wvkbd, wlogout, and some other stuff but it kinda sucked for touch.
Honestly, I tried Plasma on my friend's 2-in-1 laptop and it's pretty great with gestures and touch. I haven't tried gnome but I can definitely recommend plasma.
When distros make it the default DE, that's forcing it on them. No different then Microsoft bundling a specific browser. I also disagree that it works well on desktops. It lacks features, and tweaking it to resemble and behave like a more common desktop design is cumbersome.
I can't stand using Gnome, but it is the only one that's vaguely touch friendly. If you pile enough extensions in there, it becomes usable. Plasma has always been a disaster for me on tablets. Maybe 6 will be better, but I'm not holding my breath.
I would say plasma, Gnome has too many stupid issues for it to be a real contender IMO. I constantly found gnome to be laggy on my chuwi, even to the point that it would occasionally drop inputs.
GNOME is built for touch. if I rotate my HP laptop 90 degrees sideways, GNOME automatically rotates the screen to suit.
Its why latest gnome has so many multifinger touch gestures for interacting with screen