Is it a good idea to hand sew a denim pencil skirt with false cuts instead of using sewing machine?
Anything you can sew on a machine, you can also sew by hand.
But

It will take much longer.
If the seam is visible you must take special care to sew evenly or it will look ugly.
It's harder to sew a straight line if you don't mark it on the fabric. (There are special markers that disappear when heated for that reason).

Is it a good idea?
For the whole skirt: not really. That would make the whole process take much, much more time. If you like hand sewing as a meditative hobby, go for it. If you want to get things done on time, use a machine.
For details like button holes or the insert in the side seam: sure, why not. I've hand sewn a lot of gussets and pockets and complicated seams simply because I didn't know how to wrangle them under the machine.
For seams that have to withstand a lot of strain, a hand sewn back stitch is even better and sturdier than a straight machine stitch.