Perhaps only slightly more than a comment, or echoing certain other answers: just a few years ago I had a very good student ask me if it was ok if they knitted during my lectures (which had notes available for later, etc., so note-taking was not strictly essential, perhaps), since otherwise their minor narcolepsy would sabotage them.
I was taken aback at the issue (which I'd not really encountered before in that context, although I did have a narcoleptic colleagues some years ago...), but said "Uh, sure".
The student was able to knit (furiously!) while looking at me and the slides, apparently attentively!
Given my own impatience with lectures and such, this made me rethink several things... E.g., how to "sit still" for 50+ minutes? Play along with a regimented agenda? Is this essential to actual learning?
Sure, some people rationalize their disinclinations to engage... but, in my experience (at least with people more mature than the 18-year-old middle-class kids in the U.S. first-time away from home... at college), in the U.S., most students are acting in good faith. Even if misguidedly in some details, at least "good faith" sets a good common basis for discussion about how to accomplish our goals.
Yes, years ago I did believe in a much harsher, conformist picture of "how things should be". Well, years ago, it was hard (in the U.S.) to "succeed" without such conformity, and it would only take more energy to push back. So, as usual, the people who managed (through gender, skin color, socio-economic class) to "succeed" well enough... had no pressing reason to complain or push back.
So, "no knitting or sewing in class". Sure, why not censure things, if you can get away with it?
So, yes, the issue of "what/how to help/allow students to really benefit from interactions" is subtle. The subordinate issue of "what offends the instructor" is also subtle, but subordinate.
More pointedly, if I know the student who needs something to keep their hands busy, etc., and trust in their "good faith" (and blanket respect for me and my attempts at teaching), I have no problem with any such thing.
No, it's not that simple, generally, because in these somewhat-corporatized-education times, we are not reliably put into situation where we can understand all our students as individuals.