Yeah, this is my favorite gimmick of my Samsung Galaxy S20. 120Hz display+240Hz touch sensor makes everything feels so fast and responsive, this is the first Android device that feels faster than my iPad.
I guess it's because the latencies stack on top of each other?
It helps both slightly with latency directly, but it also gives you more points to sample from for input prediction which then helps with latency even more. Or for things like drawing applications it'll give you smoother curves assuming the drawing app looks at all intermediate touch samples.