Definitely would create more of a meritocracy for the players, better players would prosper, the injured and underperforming would be more likely to be driven out since they can be easily replaced. Good part of it for all players would be the opportunity to fix a mismatch / poor choice of school.
Definitely would be a "the rich get richer, the poor poorer" change for the schools. Freshman year might become a year to show-off talent and then musical chairs with weak players driven out of the top schools and top players moving up a level. I could see a lot of the weaker schools cutting coaching salaries and recruiting budgets. Why invest in recruiting if the good players are going to leave after 1 year, the weak players stay for 4? No coach has a 100% hit rate, especially at mid-majors.
For the low-to-mid majors, this would help the coaches who are great at game coaching, hurt those good at recruiting, with mixed effects on those good at player development.
Overall, I could see this acting as a transitional step to a P5 separation, with the rest of D1 and D2 becoming a feeder system for P5 athletics. Maybe Big East basketball wins too due to the big northern markets it brings.
For me as a fan, my interest in college sports would be lessened. It would become more pro-like. I think in the end the NCAA may end up shooting itself in the foot, losing its distinctiveness and losing the good sides of amateurism.