In arena there was never a no rank system, you were placed last when you joined. Same for tournaments. This means the first 10 players to attack after that merge get the top 10 positions, that's not really fair, and will lead to issues.
With reworks and factions being reworked, having a good roster means you are faster adapt to the new meta, new players will be a distinct disadvantage. And a new p2p will be discouraged from continuing to develop if they don't get an advantage.
Time is an equalizer along with lvl cap. F2p will always be behind but over time they catch up and the freemium model is designed to frustrate people to pay, (or quit) or be happy where they are. This system would destroy that by minimizing p2p advantage to give f2p an advantage.
This would also create a bunch more payouts unless they take 20k top players (which would be a disaster ), causing alot of committed players to quit.