A couple of issues I discovered with this workaround:
It seems like Obsidian only allows one “overlay” window in itʻs interface at a time. (By overlay window, I mean one of the windows that is in the Obsidian Electron interface, not a Windows or Mac window. For example, the settings window, or the “Quick Switcher” window, or the “Command Palette” window.)
In other words, if you keep your settings window working in a floating popout window (that is, another macOS window) then you wonʻt be able to use the “Quick Switcher” window or the “Command Palette” window until you first close the “Settings” window.
Hope thatʻs not too confusing. Point is this workaround will allow you to do what youʻre looking to do, but there are some trade-offs.