I like the idea. Or maybe set it to min (20 , max (guild size, 10)) which is effectively the same thing but putting a 50% limit on the benefit a guild of 10 or less gets.
Another option is to change it from min (20) to min (10) and be done with it if they want this type of system in place where decay is fixed regardless of guild size. This benefits all guilds and larger guilds continue to benefit the most. It's a step closer to removing decay without removing it.
Decay creates a ceiling that causes guilds to stop advancing once they hit the point there decay > avg renown earned. They move within a level range and can't make real progress unless activity level increases. Based on gulid size, here is a where a guild get stuck under the new test system based on 20 (column 2) and a system that is identical but based on 10 (column 3).
This chart shows where a guild of a specific size (column 1) that was stalled @ level 60 under the old system would stall under the new system (fixed 20) and a slightly modified version of that system (fixed 10)
As thsober said I would like to see decay removed since manipulating the formula only trades one problem for another. But if we need decay at all I think "10" makes more sense than "20". The guilds with 20 or less people are getting a benefit now, but that benefit is very short-lived and will only slightly increase the level they get stuck at.
One of the reasons I think a "test period" is very misleading for this type of change is that all guilds with 11 or more people will immediately start moving forward, but at some point that progress will stop as they simply hit a new ceiling. The smaller the guild, the faster they hit the new ceiling level where they are stuck under this new proposed system.
I also think they should lower the level for augment slots, ships and amenities by maybe 20. That is really the only reason to care about level ... at least for me.