I got the inspiration for this diegetic text system from What Remains of Edith Finch, which told its story using a similar system. My version is more simplified: the text fades in as the player approaches it.

I first used this system on my final year university project, Athonite:

It is set up very simply in Blueprint:

I experimented with the same system within Train Sim World during my work on the game (personal side project which I presented internally). My prototypes included a version where the text only appears when the player is standing at a particular marked spot:

I used a rather different version of the system on True Self, my Global Game Jam 2022 submission. In this case, different lines of text appear or disappear based on the state that the world is in (defined by the player 'state jumping' mechanic):