[badthingfactory]

I worked on a team that was set up exactly like this. Like you said, it was really effective for some ad-hoc discussion about tricky problems. The knowledge sharing was fantastic and I learned a ton.

The major downside was the chaos. If you were the team expert in some domain, you usually had someone asking questions about that domain every 20 minutes. Sometimes programming takes 4 hours of uninterrupted concentration. That work was very difficult to accomplish.

A small group of us ended up bringing in laptops and separating from the group multiple (sometimes 5) days a week. We found ourselves having to choose between finishing our own work, or helping other people finish their work.