Well, I agree it does simplify your architecture, but this leads to other issues. The major drawback I can see is that you have to align your version lifecycle for all your underlying assets. It could be cumbersome because some deployment/service/ingress will sometimes prevent you from upgrading your cluster, and you cannot proceed until a new manifest has been applied. Depending on how many person/business units you are dealing with, it could be a nightmare. Plus, you have to manage isolation and fine-grained RBAC in order to restrict your users' permissions, not to mention service mesh management.

Mutualisation is a tradeoff that does not always lead to simplicity. Multi-clustering could be a solution depending on the size of your organization.