I think this would be a great option for servers. Currently the way respawn wave time settings work, you have few possibilities.
You can either have a long one (such as the default) where everyone gets bored of waiting in a 3 v 3 match to pop up again because they are the statistically more likely to be the first person to die, and there is so few people in the game that when someone has a good streak, the battlefield is empty for 20 seconds.
Or you can have a very short one, which benefits a small game, but leads to respawn pancakes where people are popping back up in a 32 player game immediately after dying. This removes any sense of accomplishment from killing people on the other team and makes it harder to gain ground in a battle than even the old, relatively short individual respawn time.
The idea is that the server could dynamically scale the respawn wave time based on the number of active players (players - spectators) in the game. So in a small game, the wave time would be really small, to promote a fast pace for the small number of players. Then as more players join the game, it compensates by increasing the time so the spawn areas aren't always pancakes with people. Ideally the min and max values for the timer could be set by the server.
At the very least it would be nice if the new respawn wave feature could be disabled in favor of the old per-person respawning. The new system is too inflexible.