From what I have read there are crankshaft balance issues with cutting a VW engine in half, but it makes the weight issue more reasonable. I am sure there are other problems. It is probably a cheap and reasonably good choice for a power plant. I looked at some of the photo’s of the modified engines and they do not look bad.
It is a common practice, but you can have engine failures on a lot of products. It is just a little more serious when you cannot get out and kick the tires.
I am not sure what other options for power plants are out there for a plane this small. I have always wanted to fly a plane, but my wife will not even get on a commercial airline. And of course there is the money thing, do not have that either. My son and I do fly R/C sailplanes, though. Safer, but less fun.
They use the full engine in such diverse applications from auto-gyros and para-sailers to the Vari-EZ and other fixed wing ultralights.