I understand why the author thinks this is a good idea, but 404 exists for a reason. Literally "Not Found", not "I will guess at what you are looking for".

The "implications for SEO" will almost certainly not be "positive" for quite a few reasons. As a general rule in my experience and learning, Google's black box algorithm doesn't like anything like this, and I expect you will be penalized for it.

There are many good comments already and my suggestions would merely be repeating them, so, just adding my voice that this is likely to be a bad idea. Far, far, better to simply have a useful 404 page.

Edit just to add: if you do something like this, make sure you have a valid sitemap and are using canonical tags.