Yes, the ultra-compact encoding will not be self-sequencing. But the bit-6-continuation variant yields more bits per byte, which would give better compression in many languages. Regarding efficiency, you still have to read every character, with the difference being one check every 1, 2, 3, or 4 characters in a more complex algorithm vs a check on every character in a simpler algorithm (I haven't checked to see which beats the other in performance, but they look pretty similar).

This feels a lot like mixing transport layer metadata into the data format, potentially giving a small processing performance benefit at the cost of huge data wastage when certain languages are encoded.