The very obvious downside is that it would explicitly be open season on your assets in any country you find yourself in conflict with - so every UK business with assets in China for example might wake up one day and find they'd been nationalised without compensation - but, imv, to be worried about this as a new threat means having to believe that the protection against this kind of thing within functioning, universally accepted and applied international law currently exists, and I'm not convinced it does..
Personally, I think that the concept of international law as 200 countries signing up to the same thing and applying it regardless of which other states are involved in a legal dispute is over - I think that the future of such ideas is in blocks, so you'd have European international law, and North America International law, and everyone else's different versions of international law, and that if you chose to do business in China or Russia for example, you're accepting that you do so at your own risk, and that the playing field and referee are not going to be on your side in the event of some kind of conflict.
It's a pity in many ways, but I don't think that stops it being true - and I think that railing against it or pretending that the situation is otherwise is just yelling at the sea and expecting it to change its mind about getting your feet wet.