It isn't security theater at all. Did you read the link?
You wouldn't be able to switch to another application is the point. What you suggest greying out, would easily allow other applications to hijack that prompt or replace it with their own.
That's a large part of what 'Secure Desktop' aims to prevent, and it succeeds at doing so.
That's not the point they were trying to make. They were asking what would prevent malware from imitating the UAC prompt to steal administrator privileges.
> If the policy setting is set to Prompt for credentials, malware imitating the credential prompt might be able to gather the credentials from the user. However, the malware doesn't gain elevated privilege and the system has other protections that mitigate malware from taking control of the user interface even with a harvested password.
So just knowing the credentials is not enough, they have to be used in the right context (the secure desktop).
You wouldn't be able to switch to another application is the point. What you suggest greying out, would easily allow other applications to hijack that prompt or replace it with their own.
That's a large part of what 'Secure Desktop' aims to prevent, and it succeeds at doing so.