Wow...cool idea.
My favorite BY FAR was one of my most recent...4 of the very best jazz players in this part of the US recently got together to cut a radio/TV spot here at my little place...
Upright bass, classical guitar, Rhodes, perfectly tuned and played cocktail sized trap set....No islation, just well placed GOBOs and careful mic placement greatly reduced leakage....everyone in the same room, eye contact...8 tracks recorded live...no overdubs, music just recorded, tweaked a bit for EQ and compression, and final mixed...
To me, the older technique of mixing somewhat on the fly is more satisfactory, and frankly much more fun, than dealing with individual instruments track by track by track (X 40)...just enhancing what the performers did instead of trying to create some artificially developed illusion...