NCAA roster limits are still in place and schools are not allowed to recruit players on another team. I don't think it's going to change the makeup of teams much, just doesn't penalize kids.
If anything, this probably hurts JUCOs a lot because kids won't have to go there to play a year before going back to FBS.
The roster limits will be what causes kids to get cut. Well we will just have to agree to disagree then. I think it would change the sport profoundly and for worse, and leave many victims in it's path. When Bama brings in a new NCAA all star to start, their current starter also get relegated to the bench and doesn't see playing time. How does this help the kids again? Sure he could also transfer but it's very unfair to tell a kid who got a ride from their school of choice that now you have to transfer to somewhere you don't want to be because this great player from somewhere else will be taking your place. I really don't want CFB to become this. I also don't trust the NCAA's ability to enforce any rule. Schools might not technically be able to recruit players from another team but that doesn't mean shit. That's what bagmen are for.
This is a multi million dollar business. If the system is able to be gamed, it will be. Not to mention the natural process of kids reaching out and just wanting to create those all star teams to be on them.
Maybe it doesn't have to be all or nothing though. I'd be open to the possibility of a school being allowed to add a limited number (like 1-2) per year to the roster where the one year timeout doesn't apply. That would give kids the ability to transfer from some schools to others without having to sit out, and limit abuse. Like you said that attrition is already happening anyway, and this would prevent those from being punished. I still feel this would be abused though and Bama would be adding the Khalil Mack's of the world every year and relegate players who would play to the bench or gtfo of town.
For the good of the sport and the athletes they really just need to keep this right where it is.