That's the same idea the German NGO Mehr Demokratie proposes. I proposed a similar modification to MMP that uses approval voting for the direct mandate and multi party choice. The party vote is distributed equally among all approved parties, then all parties that don't reach the threshold are excluded and the vote is distributed equally among the remaining parties.
It has the same effect as a second choice, but with the added benefit that voters don't have to limit their vote to one party.