Can it handle that kind of processing?
I was thinking about the same thing but had discarded that application because of the heavy HDMI encryption, I was thinking it might be possible to use it as a switch though.
I’m thinking of simple applications where the Pi would display mostly text from the embedded system. More intense graphics could be stored on the Pi in the SD card for display on demand from the remote system though... to make things a bit more fancy :-)
It would be hard to send any sort of HD video to the Pi over something like I2C but that’s not my intention anyway.