I assume that if they brought this in there'd be some league table style system introduced to make things fair and prevent silly games like those that Pakistan played before the cut-off for Champions Trophy qualifying (basically, they moved a series against Zimbabwe back a bit to prevent it from affecting them qualifying for the Champions Trophy, admittedly for sensible reasons since they'd have lost points if they hadn't won by enough which is a farcical system), the issue then would be how would you balance teams that play shorter Test series with those that play five-game series: do you only count certain games or do you weight each game is a longer series less, making each game matter less? Certainly the rankings right now are awful; although I didn't care that much because frankly they were pointless, although if you start using them for qualifications for thing then you need to fix the problems.
If they actually bring this in then I'd be happy, its not perfect but certainly be a step forward. I'd want to see a few changes, I don't see why its a 5/7 split or that there's a big enough gap between the second and third teams in the Intercontinental Cup (currently its the Netherlands in second and Afghanistan in third, the last few competition had Afghanistan second and Scotland third and all three of those teams play very competitive games against each other) to have that as an arbitrary cut-off point, but that's more of an argument against status than anything else - one way of mitigating that would be a 7/7 split but then you'd have the same things between the fourth and fifth teams in the ICup. I'd also give the ICup games "test status" since I don't think there's an argument not to. There's also the fact that the second "tier" of Test cricket wouldn't be commercially viable by itself (Zimbabwe haven't played a Test Match at all for over two years for those reasons): I can only assume that it would have to be funded by the ICC along the lines of the Intercontinental Cup; which actually wouldn't be that big of a problem since the ICup is a really good competition, helped by the fact that usually every game matters and you don't have a dead rubber. The issue then would be that you'd probably have a more formalised schedule which probably wouldn't make a lot of people that happy...
Assuming they set this by current Test rankings and ICup positions (they're only half-way though this Intercontinental Cup competition though, they've played three rounds and there are four to go so its not exactly a fair sample of games), this is how they'd be ranked
Test Cricket Div 1
1. Australia
2. India
3. Pakistan
4. England
5. New Zealand
6. South Africa
7. Sri Lanka
Test Cricket Div 2
8. Bangladesh
9. West Indies
unr. Zimbabwe
I1. Ireland
I2. Netherlands
Intercontinental Cup (I'm assuming that they'll keep it, there's talk in the Cricinfo article about potential relegation)
I3. Afghanistan
I4. Hong Kong
I5. Scotland
I6. PNG
I7. Namibia
I8. UAE
Plus two new teams if they retain the same competition size: generally its always teams that qualify for the World Cricket League Championship, currently its Kenya and Nepal playing in that instead of Ireland and Afghanistan so it'd probably be them
Depending on when they start this Bangladesh might just sneak past Sri Lanka on the rankings; especially if they start getting more opportunities to play off the subcontinent.
In terms of the Associate teams I'd expect Scotland and Afghanistan to move up, the former especially has been incredibly unlucky with the weather (the draw against Afghanistan at home and the abandonment away against Hong Kong: the former who knows since that was always a game for the first innings lead points and you play different then, the latter we should have won), although its generally a close competition so who knows.
Another thing in that article that's encouraging from an Associate Cricket perspective is the potential addition of World T20s in 2018 and 2022 with potentially more teams (talk of "at least" 16 teams, and certainly more than 10 in the actual competition is a big step forward since it guarantees two Associates a place in the finals while the current rules don't guarantee any (incidentally, the two teams that would have benefitted from this rule in March would have been Zimbabwe and the Netherlands); personally I'd like to see some chat about expanding the World Cup for 2019 since there's still time for that but we can't get everything that we want. Its encouraging that we're actually seeing the ICC talk about expanding the game and allowing more teams to play it instead of patronising Associate nations while taking opportunities away, its a big step forward.
Something I'm still not sure of though is the talk of governance reforms in that thing; they're talking about decoupling test status and Full membership of the ICC which would make sense; but that might lead to a situation where a team is challenging for promotion in Test Division 2 without having the power than some ICup teams may have which just seems odd: I'd much rather they actually gave current Associate and Affiliate teams an actual say in the way that the ICC is ran.