College football would simply become a kind of representative government. The schools in CA, TX, and FL would dominate. Georgia, OSU, and LSU would be very good, too, but if you sort of cut off recruiting in SoCal, TX, and FL to a trickle for out-of-state schools, oh my.
The P5 would become the P1, a super-conference of UCLA, USC, Texas, A&M, Florida, FSU, and Miami.
Actually, what I see is that you'd probably see FBS split just about immediately if this happened.
ND/Purdue/IU don't want Ball State taking their in-state recruits.
Do USC/UCLA/Stanford/Cal want to see Fresno State, SDSU, SJSU each having 50 CA recruits on roster?
Does Florida/FSU/Miami want to be battling FAU/FIU/USF/UCF for recruits?
Do Michigan and MSU want all the directional Michigan schools battling them?
Ohio State is the only "major" FBS school in the state, but there are 6 other FBS mid-majors in Ohio.
And Texas is possibly the worst, with
12 FBS programs.
So the P5 programs in those states would immediately move to knock the mid-majors out so they didn't have to share those in-state recruits.
So to me, the winners of this would be Wisconsin, Minnesota, Rutgers, Maryland, Syracuse, maybe Arkansas, UConn, Mizzou, and maybe Penn St / Pitt.
If you look at decent population states but with few FBS schools, those would be the immediate beneficiaries.
The secondary beneficiaries would be the mid-majors of the high-population w/ many FBS schools, as it would allow them to put a better fence around their borders and not lose the local kids to P5 schools from out of state.