While I see risks in this and haven't thought it completely through, there also seems to be potential. Surely, there would be means to enact it so that it dissuades power from concentrating? Perhaps you can't be heir for more than one (similar) thing at a time, and take a hit for ceding it?
For example, realm X has two duchies. King Selfish doesn't really like Duke Rich, but Duke Poor is a staunch ally of his. By extension, Lord Loyal, Duke Poor's vassal, is quite loyal to the king and has been appointed heir of Duke Poor. But something happens! Duke Rich quits the game, or his character dies, or whatever else happens and he loses his duchy. With the current mechanics, King Selfish would just arrange for a few estate switches, at most, and make Lord Loyal the new Duke Rich, bypassing everyone else in the hierarchy and further concentrating power.
But if appointing anyone else than heir Rival would cause a h/p hit (for example) to both King Selfish and Lord Loyal (or one of either, directly or indirectly), then maybe King Selfish would consider accepting Heir Rival to become the next Duke Rich, or maybe Lord Loyal will prefer to pass this duchy opportunity and wait for the next, forcing King Selfish to select from a somewhat less loyal pool.
With something like this, power concentration could potentially be lessened. But the mechanics would need to be properly fleshed out, given how major this change could be.
