The problem Sacha Baron Cohen faced when making Borat 2 is that the character himself has become a worldwide phenomenon, so in an attempt to circumvent that issue, Baron Cohen became the real life Kirk Lazarus. It's fair to say that Borat 2 couldn't have come out at a better time; coinciding with the final days of the U.S. presidential election, and coupled with the ongoing COVID-19 pandemic, there was no shortage of topics for the Borat sequel to cover. But getting the chance to do that was difficult.
Borat Sagdiyev became a worldwide phenomenon when the first Borat movie released in 2006, but his popularity was especially notable in the United States. So when Borat returned to America in 2020, after first making several stops around the world (including Wuhan, China), he was immediately recognized in Texas. People on the streets were calling his name and chasing after him, so he resorted to putting a bag over his head - but that was only a temporary solution. His real solution was disguising himself at certain times.
Because Borat found himself in multiple situations - at an electronic store, in a New York hotel with Rudy Giuliani, and at a debutante ball in Texas (going under the name Phillip Drummond III) - where he needed to be disguised, Sacha Baron Cohen was playing Borat disguised as someone else. So, Baron Cohen became the real life Kirk Lazarus, a character from Tropic Thunder known for saying he's a "dude playing a dude disguised as another dude." In that moment in the film, Lazarus was playing Sgt. Lincoln Osiris who was disguised as a rice farmer. Of course, there have been many other people who meet this criteria, but perhaps only a few of them have done so overtly and in real life.
Considering how popular Borat the character is, it is truly astonishing how much Baron Cohen was able to get away with in Borat Subsequent Moviefilm. He not only got into the CPAC to see Vice President Mike Pence, and even troll him to an extent, but also get close to Donald Trump Jr. and in a private room with Rudy Giuliani, the president's private attorney. Though perhaps not illegal, those are all situations that could land someone in hot water.
If Borat 3 were to happen, the disguises Baron Cohen would need in order to pull off similar stunts would have to be ingenious, unless there are groups of people who merely don't know who Borat is - it's always a possibility. Borat wasn't always disguised in Borat Subsequent Moviefilm; in the scenes in which he was himself, it's possible the people around him were in on the joke, but it's also possible they weren't aware of Borat to begin with.