NO! It does NOT work properly.
It CANNOT work properly.
Many people have bought boats with a trapeze rigged that way because the previous owner did not know what they where doing.

The purpose of a trapeze is to get the crew weight as far out and as low as possible. (Look at the Tornado picture)
Trap rings are usually set at, or slightly above, the gunnel of the boat.

The purpose of the bungy line is to store the trapeze in an easily accessible position
AND provide an upward pull to tension the ring in the harness.

In that design;
If the ring is set in the proper location, there is very little tension on the bungy to hold the trap in the proper storage location.
There is NO tension to hold the ring to the harness while hooking up.
Instead, it is trying to pull the ring out of the harness as you are moving off the boat. SPLASH!!!

If the ring is raised to provide tension, the crew WILL NOT be in the best position.


Don't try to reinvent the wheel.
Look at the Murrays.com catalogue, page 49 http://www.murrays.com/archive/49.pdf
Look at other boats on shore.
Look at other boats racing.
Most importantly, look at the winners. If something worked, at least one of them would be doing it.