It looks like a good idea, but if depends a lot on your cat. An enclosed space like that, they might not want to use the box (only one way in/out, predators might get them!). You'll also have to keep it RIDICULOUSLY clean, because such a small space means lots of condensed odors. You'd probably have to clean it two-three times a day.
Most cats don't like confined areas for their boxes because they are vulnerable and not able to see what's sneaking up on them.
That being said our upstairs box is in the laundry room and we are considering taking the screen out of the wall between the basement rec room and utility room and trimming it out and putting the second box in there but that won't happen until we make it so she can't go in around the bathtub that's in the bathroom next to the utility room.
My cat loves confined spaces, so it would definitely work for her. Maybe you could try putting the box in a cracked-open closet for a week and see how it goes? I would love to have something like that in this house, but our basement entry is under our stairs so it's not an option.
That is so cool, but I don't know that my cat would agree to use it. I kept my box at the top of my basement steps. It was in the laundry room at my old house.