This is mostly correct (standard chess notation is slightly more compact than what you described; a typical move looks like "Nf6", meaning kNight to F6. Normally there will only ever be one piece of the appropriate type that can reach any particular square, so only destination coordinates are needed. If it's necessary to say which piece, then you just give origin and destination, but omit the piece, since it's implied by the origin, so moves are typically 3 characters, never more than 4).

As a form of cheating, the use of what are generally called "thumpers" has been around for a long time. In casinos you would have a confederate sitting at an angle where they can see the dealer's hand, who would then signal to you what moves to make. In chess they would be watching the game, constantly plugging every move into a chess program like Stockfish, and then signalling what move the computer chooses. Your opponent is effectively playing the computer, not you.

Typical thumpers are a vibrating band that goes around a leg, or something hidden in the sole of a shoe. All you have to do is sit there and look thoughtful while you decode the message, which is most likely sent using Morse code. Where the sex toys come in is this wild theory concocted by the internet that a really good way to hide a thumper from any kind of frisking would be to use a Bluetooth controlled anal vibrator, since no one is likely to frisk you there. There's no proof that it's ever happened, but now it's a huge meme that chess is basically stuck with forever.

And yes, time is still an issue. Good players can move a lot faster than the time it takes for all that back and forth communication. The strategy, if someone ever suspects they're playing a cheater, is to play defensively and run out the clock.

(edited for clarity)