It they do, offer all 400 with AAA and hopefully 200 will come, in all likelihood it might be 80 or 380.
Except in the first few years of the system you won't know the proportion of offerees who woul accept - so you could be squeezing 400 into a lecture theatre for 200!
And everyone here knows about head teachers insisting you must put their school first to get an offer - same thing will happen. Will unis know where their applicants ranked them?
What about courses that audition or interview or have entrance tests?
As @KingscoteStaff says, if Jonny's teachers tell him he's a B grade kid at the beginning of year 13 (same time as when he'd he applying under the current system), then he's spending time and energy applying to B grade places.
Don't forget even if predicted grades don't go on the application, kids still know what level they're working at. For a lot, having a slightly ambitious offer is just the kick up the bum they need.
If B grade Jonny ends up with As, the current system still allows him to apply for an A grade place.
I'm struggling to see what the problem they are trying to overcome is - the current system places 80% of applicants at their firm choice, and another 15+% at their insurance. It ain't broke! Disadvantaged kids will still be disadvantaged. They'll still be told 'Scumsville Poly-Uni' down the road would be a good fit for you. They'll still be surrounded by teachers and family and friends who don't have strong ambitions for them. They'll still be stuck looking after their younger siblings. They'll still be stuck with a slow second hand laptop. They'll still be stuck dealing with mum's MH crises. The uni admissions process isn't the problem.