As someone who has tried touchscreen drag, it does not feel like an advantage at all. To be fair this is just anecdotal and I haven't really explored this playstyle seriously though.
The ability to actually put your finger on the circle isn't as big of an advantage as it sounds imo. The "mental mapping" aspect honestly feels about the same. It feels very similar to just playing on a tablet or a mouse, like you're doing the exact same thing of moving your arm/finger to aim, it's just that your finger is the cursor you use now instead of a cursor on the screen. With having it be a bit more direct maybe there is an advantage in it being easier for your brain to learn/process, but I would say it's a similar advantage that absolute positioning has over relative positioning in terms of "mental mapping". Theoretically tablets would be better than mice because of this, but in practice it doesn't really make a difference, or at least not enough to where I'd call for a tablet nerf. Besides, I think the main advantages of tablets lie in other places outside of it being theoretically easier for your brain to process anyway.
The disadvantages are real though. Having your arm cover a portion of your screen is not fun, nor is the fact that you're stuck with a massive area relative to what you can get away with when using a mouse or tablet. There is also input lag, if you play with a cursor it will visibly drag behind your finger, so you have to get used to aiming a bit ahead. This isn't the biggest deal though, but you lose a bit of fine control because you can't make small adjustments as well, although I feel like because your finger itself doesn't have input lag it'd alleviate this when you get used to it.
Although it's probably significant to note that the one notable touchscreen drag player is a aim control god, then I'd also think it's significant to note that there is literally only one notable touchscreen drag player in all of osu history outside of probably the very beginning. Touchscreen definitely has a higher barrier of entry, but surely there'd be more than one guy who is able to use it at a high level if it was actually advantageous compared to a tablet/mouse.
They may be working on banning raking but with raking it's really clear that it's an op cheese strat that takes away an important aspect of the game. I don't think dragging with a touchscreen is the same.
I also think non-drag TD should be buffed as well. Yes with the ability to use two hands to aim it should be kept very separate from the more conventional playstyles, but it'd be nice for it to be at least viable in some capacity with lazer on mobile being a thing. Actually now that I think about it I think the best thing would be a separate TD ranking/pp/leaderboard system with the ability to tap with other fingers like with osu droid, but idk maybe all this has been implemented, never played phone lazer.