Apple'a guidelines state that the TouchBar should not be the only place for options/settings (it should only duplicate on-screen options). So, at least with Apple's own applications, you can continue to work without access to the TouchBar. My inclination is that they pop up when you move the trackpad to the top of the screen (like how apps show the menu in full screen mode now).
That makes sense. I saw those guidelines but in the demo it appeared to my eyes that in photos for example, the touchbar was the only place where the photos were. You scrubbed through on the touchbar and they appeared, but there wasn't a corresponding flow of photos underneath. Makes sense that the UI would re-appear when the cursor moves near.
Not working with an external keyboard setup would be really short sighted and although Apple has had their failures; they are usually good about thinking of that kind of stuff. (Though the hockey puck mouse got through somehow...)