I feel after having done dozens of races and witnessing people riding in an inappropriately low category EVERY RACE, that there should be no categories pre-race at all. Just start everyone together and let them race. Then after the race is complete have the system categorize the RESULTS based on some kind of power metric i.e. Watts/kg. As it is, everyone is racing against the riders around them anyway. I race cat C and after the start the field sorts itself out and I find my people. Often those people are Cat D riders in the wrong category. I race them through the entire race and they should be next to me on the leader board, not in a different Cat D board that they shouldn’t have entered in the first place.
That is what runners do, running has no tactic it is only about time.
what makes cycling interesting is tactic and we get that by having categories.
The OP has a very interesting suggestion.
I’m not sure how it would affect sandbagging.
The good sandbaggers are very aware of their power out put.