I had partly overlooked that your suggestion only applied to palace 40, since clarified to whatever the highest palace level might be.
Nevertheless. what I first wrote, which makes no mention of any specific game progress still holds true, players are already complaining about the problems with upgrading gear and failing in the effort.
Maybe I am wrong but I can't see how many top players are going to be happy with the loss of gear and gems that has cost considerably to get in the first instance, only to find that they have to be replaced.
I can see the attraction of this from the owners point of view, it is inline with most of the recent updates, where in order to obtain what I believe to be miniscule amounts of improvement, much amounts of resources etc at significant cost have to be obtained, whereas with no updates there would be no need to do this.