Here's how I figured it: You've basically got three modes of movement, "whole body," "aiming," and "viewpoint": WASD/keyboard controls your "whole body" movement, forward/back/strafing/jump/crouch. Your PoV would shift concurrently with these movements. The mouse would handle your "aiming" movement, i.e. the position of your crosshair, the front point of which would always be the center of your view when facing forward. Additionally, the yaw (compass rotation) of "aiming" movement would control the yaw of "whole body" movement, such that your weapon and the front of your body are always pointing in the same direction. Last is your "viewpoint" movement, controlled by Rift head tracking which rotates your FOV relative to your front "aiming" point (and thus front "whole body" movement axis). Your crosshair stays fixed independent of your head/"viewpoint" movement, but since yaw rotations with the mouse change your front "aiming" point and your "viewpoint" position is determined relative to it, yaw rotations of the mouse also change your "viewpoint" rotation by the same magnitude.
Basically, you've got your normal FPS controls, but your FoV is decoupled from your crosshair and crosshair position determines forward movement.
Ideally you'd have an additional motion tracking mechanism for detecting "whole body" rotation relative to "viewpoint" and "aiming" rotation, but there is none in the normal Rift configuration, and body rotation controlled by an on/off digital key press at a fixed speed is usually rather cumbersome (see doom era aiming controls pre-mouse. Plus, even having an additional rotational tracker at the level of "whole body" movement presents issue with keeping track of "aiming" rotation without any kind of proprioception due to the way mice work.
Also, how awesome would this be for a 360 degree desktop? Cylindrical view would give you 5-6x the workspace.