Microsoft announced that over 50 games on Xbox Cloud Gaming supported touch controls to play via streaming. Today, with the new Xbox Game Pass games announcement, the company has added touch controls to 16 more games on the service. There are now over 100 games on the service with touch control support for Xbox Cloud Gaming. This news comes after Xbox recently brought Fortnite back to iOS through its streaming service following it being banned for over a year thanks to offering discounted in-game currency hosted directly in the game.
Since Xbox Cloud Gaming uses Xbox console hardware for delivering its titles, it stands to reason that only games that support mouse and keyboard on Xbox consoles will receive the same level of support on Xbox Cloud Gaming. Indeed, activating the filter only lists Psychonauts 2 and Sea of Thieves, two games which do in fact support mouse and keyboard on console. I would assume these are two games currently being tested with this new feature.
There's no telling as and when this will be ready for public consumption. It will be interesting to see how well the video algorithm can handle the more precise movements of a mouse, especially since mouse and keyboard support on Xbox itself hasn't always been the best.