Not sure why you're getting downvoted, I think you're making valid points. Paternalistic laws definitely have upsides and downsides (upside of safety, downside of lacking autonomy).

I think your idea might work in cities that have designated bike lanes or bike-only roads. For example, in Santa Monica, we have some bike-only lanes, so it might work here, but like in downtown LA, it would be a shitshow and I can basically guarantee that people will die at some point. And then you have to deal with that mess.