As well intentioned as this may be, I suspect the ultimate result will be to make the hiring process even worse for applicants as employers will be incentivized

As well intentioned as this may be, I suspect the ultimate result will be to make the hiring process even worse for applicants as employers will be incentivized to avoid people who have gaps in their employment history or seem to have a propensity to job-hop. Not only that, I suspect employers will also try to add even more tests and competency-checks to the interview process.