it has many disadvantages:

1. huge confusion about disappearing files if persistence options are changed.
2. why have a size limit ? Just store everything below file:///live/boot-dev/mySANDISK/non-disappearing-home
there, there is no size limit other than the size of thumbdrive. Why go lower than that size? (it is poss. on ext4fs but not on fat32, but fat32 - however - is a poor choice anyway)
3. all stuff below /home/demo/* is just kept in rootfs and no possible second location, leading to confusion as to where is what.
CONCLUSION: drop the option "persistent home" with no replacement for that at all. drop the file "homefs" without replacement.
Everyone will be better off.

you can manually achieve it already today, if you never ever create a homefs and never use the option: persist HOME (and neither: "persist ALL"), which has no benefit at all.