Well I think it's an interesting approach for sure - really quite equivalent to baking a round edge shader on a hard-edged Low. It would be interesting to see if an asset could be done fully that way (knowing that the Low would need to be dense enough to not have overly facetted cylinders). One worry is the triangulation…
In blender when baking with a multiresolution modifier from this highpoly: The baked normal-map on the low-poly looks like this when using "Bake from multires": These are the UV seams: I thought it had to do with UV seams first, but it's unable to bake round edges anywhere at all, anywhere on the model. I noticed that…
It's definitely interesting for sure. Looking at it again, attempting what you describe with 3.1 leads to a result similar to what you are getting : a bake capturing the smooth profile of the normals from the multires high, but arranged according to the geometry of the low. But this happens only if "bake from multires" is…