It is certainly convenient to have the same setup and move the material only physically.
But as you already said, this can take some time.
And during this time you do not really know where the stuff is.
you could create a second location and move it only in MM, while it is just a posting change notice in WM. So you could at least know from MM where the material is.
But this is dangerous in my eyes too.
You certainly need to perform a physical inventory after the move is completed, as you cannot be certain that the stock is really sitting in the right bins.
And usually with such activities, you find already differences when you start moving, you find damaged materials which you want scrap, and often (too often) someone tries to optimize things with such a reorganisation.
I see several times a year when I do system mergers and migrations, when we talk about scope it is just a 1:1 transfer, but latest when I have the first test run done, then the scope changes and new ideas are growing.
With that experience in mind I would have setup a brand new warehouse (probably by copy), but then do the full cycle of movements and TOs.