Potentially it may not actually be all that awful, depending on how it's implemented. The main downside is that it puts an artificial cap on the speed at which someone can raise his physical rank, which gives them more time to develop additional content. It also encourages (read: forces) players to embrace other jobs.

Assume I'm leveling my gladiator. For the first eight hours I will receive maximum exp. For the next seven hours, my exp. will gradually deteriorate until I receive zero exp. towards my class rank and my physical rank. At this point, I can switch my class to pugilist. Since jobs have independent fatigues, I would then be gaining exp. towards my pugilist's class rank. I would, however, still have 0 exp. gain towards my physical level. Instead, my class rank would level normally while I'd gain "surplus" exp. towards my physical rank.

In practical terms, the distinction between hardcore and casual players will be evident in the number of classes one has leveled. While it may take both a hardcore and casual player a month to reach a physical rank of 30, the difference might be that while the casual player only has two classes leveled at this point, the hardcore player may have six.

Looking at it from this perspective, it certainly doesn't seem like the end of the world--at least certainly not the gamebreaker it could otherwise be. I still think that a rested exp. reward system would be better (I'd much rather see Square Enix give exp. gain bonuses to players who log out in cities for periods of time than punish those who want to keep playing).

I think the success or failure of such a fatigue system largely depends on the manner in which they choose to utilize surplus experience points. If they're redeemed for something valuable, it may be beneficial then to embrace the suggestion to level additional jobs instead of specializing in only one.