I don't have a problem with the idea or theory on paper. The idea has a problem of implementation. Nearly half of populations are above the mid-line threshold and grouped near centrist:
https://www.gotoquiz.com/politics/poli-compare-parties.html
It could work for libertarian types, but not for authoritarians. So the question remains, how do you make authoritarians, not be authoritarians?
At least the Second Realm attempts to set itself apart from the authoritarian people. Authoritarian systems have a really poor history of leaving anti-authoritarian people alone.
Can you see the issue there, what are your thoughts on it?
RE: Is Panarchy The Answer?