I'd rather see something where the regular season is shortened to like 140 games and have it end around Labor Day. Then have a full 8 teams per league make the playoffs with FULL 7 game series with the World Series still finishing at the end of Oct / beginning of Nov.
Then if you wanted to have something like this relegation setup for the teams that don't make it in, go ahead. They can all play each other and their minor leaguers still get to have all the "call up" time that the playoff teams don't get.
I also think we need to get rid of the nonsense of pitchers hitting, fans want more scoring, not less. Additionally, we can address some of the length with a simple rule that any pitcher that enters the game must face 3 hitters. If the pitchers are injured, they can bypass this rule but must go on the DL.