I've used my Nikon F3 with a waist-level finder in this manner. It works reasonably well, especially if using wider lenses and smaller apertures for greater depth of field so you can scale-focus.
Since the F3 meter is built into the body, I can set the exposure to auto and don't have to look at the meter display, which is very small with the waist-level finder.
If you want to use the built-in magnifier, you have to bring the camera closer up to your face, which sort of ruins the idea of being candid. At waist-level, I can see the screen well enough for framing and composition.