Yeah, it works great and considering that you can get a derailleur and shifter for <£50 (used) it's a pretty good setup.
He's routed the cable under the tape in that one. Maybe it's the weirdly shaped cables in the other bike, don't imagine they'd feel good under the bar tape
I use a similar setup to you. Friction bar end shifter with X something sram 10 speed derailleur. I've routed the cable under the tape and it works fine, I know it's not indexing, but the derailleur returns very smoothly
He did the same on this bike: