Sure!
So the desmos is a very simplified version of my problem, but in 2D. Basically the solution that I am trying to add is that there is a point in 3D space that follows mouse at all times. It needs to be be on the cursor at all times so I can apply math to determine the initial rotation (as 0,0,0 in Euler) and then add degrees correspondingly to how much the player has rotated the gizmo, just like in the second video.
Here's another video of my issue (I added big black box behind so the cursor is more visible) -- see how the point (represented by 3 axes lines) does not really stick to the white dot that is the player mouse? That's my issue because it would create wrong angle.
The vectors in the game are used also as a "locations" in 3D space, so for example something like Vec(0,3,4) would describe a position in a World space. I can also transform between World/local spaces (I suppose there is an equivalent of this operation in pure math, I think another coordinate system?) But this is not really important, because almost all numbers change - like bone position, player position, player rotation, player cursor.
The only static thing that I have is the player cursor position in 2D space, however the values for that are in pixels in relation to screen size, so not really applicable in 3D.
However! I do have a function that "translates" cursor position to 3D space, but it returns a normalized 3D vector describing the direction the player is looking at (you know, for example facing "East" world direction, the values go below 0 on X value to max -1 which would be facing exactly East)
I am willing to provide as much info as you need guys, I am trying to solve this for days and I know I'm getting close.