It seems to work just fine with SIP enabled. I just switched and it seems to be a lot better than Amethyst. Amethyst had a lot of issues with focus follows mouse and dropdown dialogs that seems to just work with Yabai
Seems like SIP is only needed for system dialogs etc so has the same limitations as Amethyst
(I have done quite a bit of research and testing on these, and keep using a mixture of Moom and Phoenix - here's my full list: https://taoofmac.com/space/apps/window_managers )