The title is probably as clear as mud, but to illustrate,

Say I have a character in footage from a game, and I want to cut them from the scene so that I only have the character, with the rest of the frame alpha transparent so it overlays perfectly on another video. Something like this:

I'm of course talking about doing so in a moving video, where the character is moving, waving his arms, etc.

Is this possible, and if it is, is it practical?

Well you could use the rotoscope effect to do this. But you will probably find that it is not practical to do it as it becomes very tedious work track the rotoscoping around the moving footage.

Maybe there are some high end video editors that can do automatic edge detection and do this sort of thing. But not Kdenlive.

Now if your character was against a green screen/blue screen it would be different.

It is unfortunate that the character is not against a green screen, but as I'm merely intending to do a GMV, (Game Music Video) I don't have access to the game's raw assets. I'll give rotoscope a try and see if it works.