So, addresses get rewritten as:
From: yahoousername-AT-yahoo.com@mydomain.com
My sense is that someone could come up with arguments as to why this is a bad idea, ...
It's a bad idea for the same reason that all of the other anti-DMARC hacks are a bad idea, they break the existing usage of mail.
Under the current unpleasant circumstances, it's not much worse than any other, give or take what you do with the replies. Do you forward them back to the original user? Reject with a mysterious failure code? Discard them?
RFC nitpick: the mailbox part of an address is limited to 64 characters, so this has some risk of violating that limit, and there are a few MTAs that care. The domain part can be up to 256 which is why I put my noise there.
R's, John