Wouldn't this give a massive advantage to exchanges? They will own a huge amount of coins on the new chain but will not be required to pay them out to anybody as they will of course not keep separate user balances.
This provides an alternate path for current Bitcoin users as well. All long-term Bitcoin holders start with their coins on the new branch, that is what makes this project / alt coin different from other alt coins. We have plenty of alt coins with different parameters. What we don't have is an alt coin that preservers the first 7 years of Bitcoin ownership. If you own Bitcoin's you will already own part of Satoshi's Bitcoin after it activates.