I can see problems.
For one, it’s no longer truly a peer review.
We haven’t had true “peer review” for a long time. The volume of submitted manuscripts has been overwhelming, and in most fields the science too specialized for meaningful peer review to take place. This is an attempt to cope with the problem, but it will be doomed to fall short.
Already, worldly researchers have grown cynical and talk not of “peer review” but “pal review.” meaning that there are only a few people qualified to pass on each other’s research, and they all know each other, and they aren’t going to sabotage their friends. Science as an enterprise, it ain’t what it pretends to be.