Singha, you have to understand the architectures involved. Missile defense has a lot of nuances and there is a wide difference in tactical and strategic systems in terms of their architectures, design, cost etc. The current US Missile defense architecture is very very heavily geared towards threats emanating from North Korea or Iran, two countries with which A) there exists a capabilities/technology mismatch, and B ) there exists a economic mismatch. You see the AEGIS system (carve out the ABM portion and leave the ship defense aside for the sake of this discussion), THAAD, and even GBI to a large extent - all these systems are built around expensive sensors very heavily focused on pure ballistic missiles, discrimination and then use expensive interceptors and shot doctrines (look shoot look).
This is OK against a NoKo and you can very easily (in case you are the US) shoot $20 Million dollars worth of interceptors against a $3 Million missile because the economic balance b/w the two countries allows you to do that (you can produce way more $8 MIllion interceptors compared to the other side's ability to produce $ 3 million missiles). Similarly, take the TPY-2 for example, it is a sectored radar (and so is THAAD) that focuses on the ballistic missile threat from a known area with known type of missiles. A near peer can simply use glders to go around such a defensive bubble with anything above IRBM level boosters..The GBI too, until it gets MOKV in the 2030s, is geared towards a limited North Korean ICBM launch with relatively low level of countermeasure capability. All of this they are able to achieve with the $8--9 Billion or so MDA defense budget which comes it at around 1.2% of the entire US defense spending (so literally pennies).
The Hypervelocity Gun Weapon System is a tip of the spear tactical system that would be below the Patriot which is currently the lower tier system in the terminal defense...(its AEGIS ---> THAAD ---> Patriot and eventually the gun system would be below that). You are not going to be defending against long range ICBM class gliders with it simply because you cannot defend those targets with such a weapon (you aren't going to be littering the entire Continental US with artillery systems because this thing only shoots at 20-25 km range against that target set)...The US Army and Marines are paranoid about their troop concentrations being saturated with entire spectrum of cheap to highly capable ballistic and cruise missiles (this is one reason that the Patriot now carries 80 PAC-3s per battery) as they are always fighting forward deployed..This helps there..
Against more tactical systems, it will most definitely be used to shoot at them utilizing atmosphere for lower altitude intercepts where the warheads tend to be slower. The neat thing about it is that it is very cheap, both to put together (SCO is literally using existing systems) and to field if it works out. If it doesn't they can work on more complicated systems and the cost and time they spent doing it wouldn't be significant. A Patriot CRI missile (not MSE) costs $3 Million at rate production..A modified HVP with command guidance and a small warhead costs roughly $85,000 at very very low rate production so potentially halve that for a fielded system that is at full rate production.
The reason the SCO system uses a very innovative X-Band Interferometric Fire Control system ( see below), with a demonstrated angular accuracy of 17 micro radian or better at X-band, along with an S-Band AESA surveillance radar is to achieve that pin point accuracy as the HVPs themselves don't really have any seeker (use command guidance). The idea as you rightly imagine is to flood the incoming warhead with accurate HVP that can travel at high speed and carry a small warhead...This will be done at very short tactical ranges (around 25-30 km max). There is no reason why this will not work against non ballistic or supersonic threats...in fact if I am not mistaken they are keeping cruise missiles and UAVs as part of the target set against which they will be demonstrating this as well but those are also better suited for lasers, something that they actually now have deployed (MEHL is now in Europe on a test deployment and USN has it on USS Ponce). While the SCO is more interested in flipping the cost equation when it comes to tactical theater based ballistic missile defense, General Atomics, out of their own pocket are taking their 10 MJ Railgun (Blitzer) and a proprietary round (not the HVP) and demonstrating the system against a cruise missile later this year..They have not yet indicated what sensors they will be using for fire control but in the past have said that if their system is chosen then it will integrate with existing Army sensors so I am assuming the Sentinel radar.
HVGWS FCR -
HVGWS Surveillance Radar -