Why would that be preferred? And does this only work when explicitly ranking/approving both, or also for bottom ranks? In that case one could state the rule as just: "A candidate is unbeaten if there is no other candidate that is ranked higher by more than half of all voters." Which also would be easier to calculate and visualize.

If ties count in favor of both candidates when they are compared, then at the bottom ranks, voters would want to make up a ranking for those candidates just because it would hurt whoever is put lower in the ranking.

Generally, this system reminds me of a system I thought about a while ago but I don't know if I wrote about it anywhere. (The thinking behind them is basically the same.) It works like Minimax Condorcet with co-equal ranks, but there is an approval-like cutoff in the ranking. For tied candidates above a ballot's cutoff, the ballot counts for both candidates in that pairwise matchup. For tied candidates below a ballot's cutoff, the ballot counts against both candidates in that pairwise matchup.

Ultimately the thing that I really don't like about that system is that the notion of a coequal ranking is deceptive: coequal rankings sound like they are intended to indicate that you support both candidates equally, but the system is designed so that they really serve a strategic purpose.