Per tester reports, the way it currently works is that damage scales depending on relic level difference up to a maximum of +/- 95% with a four relic level difference.
So if you have two characters and one is R3 and the other is R7 and today they would each do 10,000 damage to each other (just for the sake of explaining), after the change the R3 character would do 500 damage to the R7 and the R7 would do 19,500 to the R3.
What's likely to happen is that an R5 Phoenix team won't beat an R7 (or higher) Reva squad post change. Or that R5-7 JML team won't beat R7-9 GLeia squads, maybe R7 SEE+Wat will get run over by Malgus teams now since they all have R9 Malak and DRevan, etc. Currently things like Expose and Plague aren't affected because lolCG but they're taking a look at those, reportedly.
There's also the issue of Conquest. Tier 5 is R8 units and so now you may not be able to drag along random LS unit w/ JML for kills or use your R5 team with all your awesome disks.
I think people are more likely to disengage even further from GAC and TW rather than rush to take all of their teams up to R9. If Conquest becomes more of a slog, then people will stop that, too. And at that point, they may wonder why they're still playing at all.