Reddit mentions of Understanding Industrial Design: Principles for UX and Interaction Design

There are absolutely UX designers who work with physical products - you'll find a lot of Internet of Things and Home Automation companies employing them. UX designers are also involved with stuff like gaming consoles, smart appliances etc.

This book is explicitly for UX Designers doing Industrial/Hardware work which I found really useful. The scope of UX has always extended outside of laptops/desktops/tablets, but people who enter this field without understanding it or its roots mistakenly think that their work starts and stops at the 2D interface

You'll also find that most HCI/Interaction Design university courses talk at least a little bit about integrating digital technology into physical products - a project of mine in design school had me hook up an Arduino to a clock and a proximity sensor and some LEDs near the entrance to my university and had the entire thing show different pictures to people coming in based on if they were late or not, and logged the date and time at which the proximity sensor was triggered. I then visualised that data, extracted insights from it and made an infographic on punctuality and attendance habits and it was a lot of fun.