To put it simple, your scoring criteria really ignores aspects of BJJ and wrestling and diminishes their value. If a guy progresses to someone's back and tries to get in a RNC, they are closer to finishing the fight than a glancing elbow that causes a superficial cut scored as "damage". They've displayed they are better at the aspects of mixed martial arts as well. If someone is going between guard, half guard, side control and landing small blows the entire round without much visible damage yet they get caught with a glancing shot that causes a cut, they lose as well?
My proposal does minimize the value of BJJ and Wrestling to a degree, but only as a means of "control," which is what I think is the most over-valued element of fighting.
Wrestling and grappling in a fight that is designed to be entertainment/spectacle should be martial arts that get you to positions to do significant damage (or in the case of pure grappling at least "threaten it" via submissions). So they are a means to an end - just taking someone down or getting past their guard is not damage, but it does give you favorable positions to be able to do significantly more damage then your opponent. They are at their core control-based martial arts and control is a means to do damage in a fight, otherwise it's just a slightly favorable stalling position if it's not being used accordingly.
Getting an RNC without a gassed/broken/low-level opponent is pretty rare in modern high-level MMA. What we typically get is a high-level grappler can get to that position (Islam or Sterling are the recent examples), but their opponent isn't gassed/hurt/bad at grappling so they never even get close to submitting them. In fact, they don't even go very hard for the submissions because they realize it's a waste of energy, so they do just enough "work" (i.e. pretend like they are going for the choke while throwing pitter-patter shots that do no damage) to keep the fight from being stood up.
I'm a grappler first and foremost and I say this from experience - if a choke doesn't finish you, it doesn't really do any damage (though there are some rare instances where it can tweak your neck or jaw). You can say it was "close to ending the fight," but if you go for a choke and don't get it all that happened was you squeezed your arms really hard to suffocate someone and it didn't work, so now your arms are tired and they are relatively undamaged. By the same logic throwing a haymaker that misses the opponent was also "close to ending the fight," but just like a choke submission if it doesn't land it doesn't do any damage. Joint-lock submissions are what we should be promoting/rewarding more highly, as they cause damage even if your opponent doesn't submit (Ferguson against Oliviera/Dariush, Phil Hawes against Roman Dolidze). They also encourage aggression and offense, which means we'll get less tactics of control and more tactics of attack.
I'm not saying "cuts are the best indicator of damage" which is something that gets brought up - how a cut is caused is more important than the cut itself (i.e. a knee to the face that splits your head open is way more damaging strike then a glancing elbow that slices your face but doesn't land hard), but cuts can later play a role in affecting your ability to see/fight so can lead to absorbing more damage later, but the cut in and of itself isn't necessarily what we should be looking to score as "damage" (in my opinion, since the cut itself is superficial, it's the strike that caused the cut we should be judging).
If you are a dominant wrestler/grappler and an opponent cuts you or hurts you with a strike before you take them down then you will have all the time they are in your preferred fighting positions to get that damage back. The problem with the current ruleset is that the guy who gets the takedown knows he doesn't actually need to do any real damage to win the round - even if he just holds from top position in guard without throwing much 90%+ of the time they will get the round from the judges (the guy on bottom would need to be absolutely destroying the guy in top to get the nod).
If we used my proposed system the wrestler/grappler knows he can't just hold in guard or work to back-control and fish for an RNC he's never going to get. You aren't displaying you are better at "fighting" by getting dominant grappling positions and doing no damage, you are displaying you are better at "self-defense" since you are just trying to limit your opponents ability to damage you more-so then you are trying to damage them.
Ask a fighter if they'd rather get beat up with brutal shots on their feet for 1 minute or get taken down and held/controlled with small weak shots for 4 minutes. If it wasn't in the context of MMA judges scoring it every single fighter would rather be controlled for long periods without eating real damage then be legitimately hurt even for very short periods of time. That's why it's a "fight" in the first place, we are trying to see who is better at hurting someone in hand-to-hand combat, not who can showcase they have a deeper mixed martial arts skillset - if that skillset doesn't lead to dominant violence then it really isn't doing us any favors as fight fans.
I do get the perspective from a "fight purist" that this changes the balance of the martial arts, but they already are highly effected in so many ways - rounds, length of rounds, gloves, limited techniques, etc. I just think the trade-off is worth it because it wouldn't eliminate those martial arts, it would just change how those that employ them would use them (as a means to do damage, since they would know that's what is being scored).