Yes, but that is implementation detail. You can still have larger entities by these individual owners cooperating, or even collectively using their property. The end result is similar to a corporation with many shareholding workers. A better argument would be that people will not invest if they will lose the property. But even that has a fairly natural solution: hand it over to your kids, they will keep working it.

I am not arguing this is a super good idea, just arguing it does not have the usual immediately glaring flaws and deserves some consideration.