There are some immediate problems with this - getting a correct 50% balance requires tuning, the expo conversion, if done using transistors, will require matched transistors which will also be heavily affected by temperature, and the audio signal must be unipolar or the transistors biased in a special manner.
But would it work in practice? That would be a fun little experiment :) not sure it will save us any parts compared to two lm13700 based linear VCAs controlled by a computer though.
EDIT: I've tested the LINEAR version of this and it works well.
EDIT: I've tested the LINEAR version of this and it works well.