That’d be good for handling a dynamic response to the PCs presence in the dungeon, but I wouldn’t use only that. There’s also wandering monsters (as already noted). If you give the PCs tools to control their engagement in encounters, then the guidelines for encounter building become a bit more advisory because the PCs can pull back and retreat if two encounters combine into something particularly dangerous.
Of course, the real struggle will be training players to stop assuming that the PCs should expect to win every fight, and that they have to engage smartly if they want to survive.
Yeah, one risk with players today, from what I can tell, is that you run the risk of them 'dead fishing' the responsibility back onto the GM, you can find a lot written about how a 'TPK represents a failure on the part of the GM' and rationalizations about how players are almost always justified in expecting to never have to run away, and other such things. If they decide not to run, and lose, and are mad about it (even in the politest terms) it can create a lot of pressure for the GM to 'correct' their own behavior.
Part of why I tend to think of it more as a hybrid model is actually for the reason you mention. This model might involve combining and splitting encounters, but goes out of its way to mitigate the presence of encounters that are too much for the party to handle from a 'combat as sport' framework if they do mess up. The encounter itself might be a bit of a nail biter, or be more resource consuming than the players would prefer from a strategic point of view-- but it won't kill them unless they follow up their earlier mistakes with bad tactics and dice rolls, whereas the pure old school approach would center the necessity of retreat, and accept the character death as par for the course.
I imagine Wandering Monsters fitting in as one of the 'encounters' loaded into the location the players are adventuring in. I've been developing a framework for thinking about 'adventuring locations' that are like 'adventures' but instead of being a chain of events that must happen, its a physical space that contains content, any given example of which the players may or may not interact with, stumble into, or have stumble into them.
So lets say I develop 8 low-trivial-medium encounters out of my adversary roster, I'd key 6 of those into my dungeon map, in certain spots, with notes on how they might possibly combine into severe, or at most, barely extreme, encounters (you would never want even a combined encounter to cross the latter threshold, so you would design around that expectation to keep them firmly separated.) The remaining couple, I might treat as Wandering Monsters (they might be a single monster, or a few creatures.)
This model rewards good explorative play with easier encounters, but allows for the joy of outplaying a dangerous challenge in a fight-- it might be the sort of game someone interested in old school adventure dynamics could enjoy, without completely alienating the new school mentality of characters being empowered in and of themselves.
For context, I intend to combine this model with a decentralized approach to adventuring, where the emphasis is less on save-the-world plots and more on themes like 'adventuring as archaelogy' 'adventuring slice of life' and 'what segments of the location will we explore this time?' in a nautical west marches, where you have to get the treasure safely back to port. Treasure Hunting is central to the game I'm planning, though I don't think I'll be using any treasure as exp variants (I'm going to be using ABP, and want them to be able to exceed the wealth curve, or fail to meet it, based off their wits and abilities.)
