Would like to see some data on this, but it sounds like an effective rating system. I’d be concerned that getting statistical significance would be challenging without creating pseudo pairs of labelers likely to disagree on issues.
It doesn't necessarily doom the system though, as long as people with extreme views don't outnumber more moderate people.
Of course the horseshoe effect is not some objective truth that's true in every country, that would be silly. I think the interesting part of it is that extreme ends of any political spectrum experience a similar environment: they are often shunned, distrust the mainstream media, attract social outcasts, etc. Just the shared experience of being on the edge of the spectrum often leads to similarities between them.
Often these few common topics overlap with the libertarian viewpoint.
Edit: unless we are talking about one or two party systems, there the dynamics are stranger
Speculation. Also, this system predates Musk's acquisition.