I cannot even begin to imagine how anybody could find that desirable. 3-5 people in one room? So you still get distractions, lack of privacy, and the room will probably be too damn hot more often than not (some companies get this part right, most don't in my experience)... and unless you entire team is those 3-5 people, you still don't get the purported advantage of maximum ability to communicate and collaborate without having to get up and walk somewhere. This actually sounds like the worst of all worlds to me.
Then again, I'm strongly biased towards the belief that programmers should have private offices with doors that close.