I started seeing guides for setting this up pop up on the internet. Has anyone done this? Can this really replace my paid VPN service? Would it make sense to use both?
It's free up to a point but yes you could set up a VPN server in a vps. You'd lose some features like multiple locations of where server is, and likely logs will be kept, so if it's used for nefarious purposes it's likely easier to find you.
Edit: just looked at the project it's ikev2 only which isn't supported natively on android you have to use strongswan, also if something goes wrong since it's "one-click" simple if something doesn't work you probably won't know how to fix it.
It really depends what you want out of a vpn service. If you just want to stop your ISP interfering with your traffic or protect yourself on public WiFi then running your own vpn server is fine. But you have about the same anonymity using a VPS as you do with your regular connection as it's a registered in your name and you're the sole user. If you want to use it for torrents then any data notices will go to the vps provider and they will either forward them to you or just cancel your plan.
VPN services do a lot more then just throw openvpn on a server box, they have done all the legal work to make sure you are protected and having multiple users using the same shared IP address makes it more challenging for someone to deanonymise the traffic.