That's really cool and I wonder why more games don't feature stuff like this. Aside from the very brief Locke/Sabin/Terra split in FFVI, Square has never incorporated branched gameplay like that. Imagine how much cooler XIII would be if you could partially choose the chapter sequence in the first half of the game.
I "wrote" a mock Final Fantasy game (in massive detail) when I was 15, and after one of the disc changes, half your party went to one continent and half went to another, and you got to choose which order to play them in before reconvening for the final disc.