Thank you for the support, and agreed on OS-level integration. At least for me, I have trouble trusting any app unless they are open source and have a transparent codebase for audit :)
If you want a rabbit hole to go down, looking into cursorless, talonvoice and that whole sphere.
Actually dictating code, but they do it in a rather smart way.
I have mixed feelings about OS-integration. I'm currently working on a project to use a foot-pedal for push-to-transcribe - it speaks USB-HID so it works anywhere without software, and it doesn't clobber my clipboard. That said, an app like yours really opens up some cool possibilities! For example, in a keyboard-emulation strategy like mine, I can't easily adjust the text prompt/hint for the transcription model.
With an application running on the host though, you can inject relevant context/prompts/hints (either for transcription, or during your post-transformations). These might be provided intentionally by the user, or, if they really trust your app, this context could even be scraped from what's currently on-screen (or which files are currently being worked on).
Another thing I've thought about doing is using a separate keybind (or button/pedal) that appends the transcription directly to a running notes file. I often want to make a note to reference later, but which I don't need immediately. It's a little extra friction to have to actually have my notes file open in a window somewhere.
Will keep an eye on epicenter, appreciate the ethos.