Where is the 5.8 full site editing feature?

I was tripped up with something similar initially. First thing I would do is review the " Step 1: Setup your site" section of the FSE Editing handbook:

For me it was the realization that you have have a theme that supports it. The default twentytwentyone theme doesn’t have that support, and instead you need to install the tt1-blocks theme.

I was able to get things up and running like so:

  1. Create new site in Local

  2. Right-click on the site and select “Open Site Shell”

  3. Use WPCLI to install Gutenberg and tt1-blocks

    wp theme install tt1-blocks --activate
    wp plugin install gutenberg --activate
    
  4. Log into the site and see the new “Site Editor (Beta)” item in the menu

Good luck and have fun!