The same flag seems to work fine with chromeos=0 linux build.

I took a look, the issue is that the coordinates of the touch event are already translated into the XWindow space vs XDisplay space that things like mouse events are in. X11WindowOzone checks the coordinates in XDisplaySpace, and depending where on your desktop the Xwindow is most events are not in it.

If the XWindow is at 0,0 it works correctly. I'll get that fixed today, should be simple.

The following revision refers to this bug:
  https://chromium.googlesource.com/chromium/src.git/+/3def26c4e1279c811262fec8f75208743ff09865

commit 3def26c4e1279c811262fec8f75208743ff09865
Author: kylechar <kylechar@chromium.org>
Date: Thu Jul 13 20:20:23 2017

Fix --touch-devices in Ozone X11.

The |root_location| of the synthetic touch event isn't set which breaks
event dispatch. Since Ozone X11 is used for testing off device, and
proper touch screen associations don't exist, just set |root_location|
on the event.

Also only parse the --touch-devices flag once with Ozone X11, it's not
necessary to do it multiple times.

Testing with the following command works for both displays:

./chrome --ash-host-window-bounds=900x900,900+0-900x900 \
  --ash-touch-hud --touch-devices=X

Bug:  741824 
Change-Id: I0377db53eb07a4b1e1412dffbda4cc7325a55118
Reviewed-on: https://chromium-review.googlesource.com/570382
Commit-Queue: kylechar <kylechar@chromium.org>
Reviewed-by: Sadrul Chowdhury <sadrul@chromium.org>
Cr-Commit-Position: refs/heads/master@{#486469}
[modify] https://crrev.com/3def26c4e1279c811262fec8f75208743ff09865/ui/events/platform/x11/x11_event_source_libevent.cc
[modify] https://crrev.com/3def26c4e1279c811262fec8f75208743ff09865/ui/ozone/platform/x11/ozone_platform_x11.cc
[modify] https://crrev.com/3def26c4e1279c811262fec8f75208743ff09865/ui/platform_window/x11/x11_window_base.cc
[modify] https://crrev.com/3def26c4e1279c811262fec8f75208743ff09865/ui/platform_window/x11/x11_window_ozone.cc

estade@: FYI