Assuming the system works as followed, let me just point out the flaws.
The first hit would just matter to much.
Example: You have 120k Life non boosted and 160k Life boosted.
Now you get hit for 20k on the first hit which would bring your Life to 100k (-16,6%) with the still non boosted gear instead of 140k (-12,5%) for the boosted one.
Thats 4,1% extra damage out of nowhere from the first hit.
Not even into calculation taken is that the attacker would also have a 200% Critical Hit Damage bonus for the first hit instead of the 150% one for PvP.
In addition, you would have less armor, less dodge and less parry on the first hit, future increasing the damage you take.
So how about gear stays on the highest possible iLvL for both PvE and PvP Gear in Open World environments while PvP gear scales down in Dungeons/Raids and PvE gear down in BGs/Arena.
After all, Holinka already said it would be ok if a friend keeps you in combat to boost your iLvL so why not go a step further and just make everybody the strongest they can in Open World Zones?