That video strongly implies that circuits in functional encryption are entirely unrelated to electrical circuits, so I must have made a bad assumption. The second thing I got out of it is that there is a strong presence of asymmetric encryption between two remote parties. That sounds to me like another layer of security in SaaS.
I’m still not convinced that cryptography solves the problem of making reverse engineering impossible, or even impractical. Here’s a slide from the presentation that visually shows why I believe it’s dubious:
Alice is providing Bob a subset of the key which only recovers a subset of plain text messages. This is a representation of how the “trial” or “demo” build of an application compiled with indistinguishability obfuscation works, according to the quoted answer on stackexchange. The “holes” in the key are the parts of the interface that are removed from the trial build.
So here’s the problem with this method. Charlie comes along and purchases a full version of your obfuscated software. His key now has fewer holes (or perhaps no holes at all) giving him unfettered access to most or all functionality provided in the application. Charlie can either share his key (pirating), or do black box testing to reproduce your software.
Another weakness of obfuscation is clean room implementation. This is the distinction between Photoshop and GIMP or Krita. Neither project had to reverse engineer Photoshop to make an application that can edit photos and digital paint. And these are all examples of very non-trivial software.
If you want to invest in protecting your IP, your best bet is probably a legal approach not a technical one.