Neat demo! I've thought of doing something along those lines before, but never had enough motivation to explore it. Great to see people are still finding out new tricks with the PPU even in 2019!
Though I think the drawback is evident from your ascii-diagram: A true mode7:ish scaling wouldn't suddenly scroll +2 or even +3 pixels, with the pixel increments being constant everywhere else. It would be interesting to see this animated, to evaluate how perceptually smooth it can look given this sort-of-harsh pixel skipping.
I wonder if the most practical use of this new technique would be as an interpolation method for the High Hope:ish bankswitching "cheat"? That way you could reduce the effect to just +1 scroll changes to smooth things out and substantially save on the graphics tiles you need to bankswitch to achieve the same results. Going with the reasoning that as you are already probably doing all timed scanline code for the bankswitching, you might as well put those spare cycles to good use...