Aside from technical problem which already mentioned by @pooya87, who's the target of this security method? I expect that,
1. Regular users don't bother with such complex setup.
2. People with serious security concern already setup their airgapped/cold wallet and don't bother switch to new protocol.
3. Exchange won't find it's useful since they regularly move big amount of Bitcoin (which means they always need "master privatekey" & "master passphrase").
regular users will have the same benefits, the limit of the amount could be reduced in the aforementioned "owner's btc book" at the time of announcing that the "subwallet address" belongs to that "master privatekey". that is, if a user owns 2 BTC, he could establish that the master private key is used if the amount to be sent is equal to or greater than "0.2 btc", therefore his risk of loss is reduced to the established limit, while his master privatekey It will remain hosted, on paper, encrypted or in a hardware wallet.
Exchanges could increase this limit in the "owner's btc book" for example to "100 btc", if the requests for signatures with the master key is reduced, then the risk of hacking will be reduced.
Security protocols must be constantly updated. If we have learned anything from technology, it is that sooner or later they become obsolete. BitGrail, KuCoin, MtGox, Coincheck to mention a few, they relied too much on their security protocols, when talking about money the saying "if it ain't broke, don't fix it" is not valid.