It's unclear to me what advantages this proposal has over a HTTP/2.0 proposal using HTTP Upgrade. AFAICT, the client is unable to rely on HTTP/1.2 support in the first roundtrip. Therefore, it cannot begin utilizing the new proposed features. Relying on the HTTP/1.2 HTTP-Version within the Request-Line and Status-Line strikes me as less safe than trying to use the Upgrade header to attempt to upgrade to HTTP/2.0, as it seems much more likely for intermediaries to have broken HTTP-Version parsing than broken Upgrade support. In contrast with this proposal, when using the Upgrade header, there is much more freedom to change the wire level representation of the protocol. And if you're going to do HTTPS anyway, using TLS-NPN to negotiate a completely wire level representation (without an additional roundtrip over the TLS handshake roundtrip[s]) likewise enables more freedom to add features.
It seems like the main reason to prefer this proposal is if you do not want to write another parser for HTTP/2.0 and think that new features afforded by a different wire level representation are not worthwhile.
Another thing to note is that this proposal effectively adds on multiplexing without prioritization. Prioritization is fairly important, otherwise the client application has to do application layer throttling in order to reduce contention. Adding prioritization would help obviate the need to make the link utilization vs contention tradeoff.