This kind of system will suffer from the ratchet problem. A single bug that negatively impacts state is no longer fixable by rebooting. Instead, you have to format/reinstall. Unintended state becomes permanent, and upgrade paths constrained to the point where you must do intentional damage. I'd also be leery of fragmentation. The project is falling into the "simplification trap", where all it's doing is moving inhere…
Isn't that what snapshots are for? If rebooting breaks then rollback to a previous snapshot of the kernel or core components but keep all the users data intact.
The whole point of Phantom OS though is that there is no separation between them. Instead of having files, you just keep the data in your program's memory, and rely on automatic system-wide persistence to keep it safe. So the only thing you can roll back is entire system.