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Doesn't this only work because the square is a uniform color?

Yes, the existing code could not handle overlapping objects of different colours, nor textured objects.

However, in theory, the technique and code can be extended to handle those cases. It's just more demanding computationly-wise.

Adding overlapping objects of different colours is somewhat easier (but still hard) than adding textures.

To make overlapping geometry possible, UAVs could be used.

It's the same technique that can be used to achieve Order Independent Transparency.