From the picamera FAQ:
6.3. The preview doesn’t work on my PiTFT screen
The camera’s preview system directly overlays the Pi’s output on the
HDMI or composite video ports. At this time, it will not operate with
GPIO-driven displays like the PiTFT. Some projects, like the Adafruit
Touchscreen Camera project, have approximated a preview by rapidly
capturing unencoded images and displaying them on the PiTFT instead.
Based on this I went ahead and purchased the DSI touch screen.
After receiving the display, I am able to report that everything works as intended.
So the answer to the questions is: YES!