If there's any significant re-engineering effort required I don't think it fits the SE pattern of re-using an old design once more when it's right at the end of its lifespan. The usual pattern would mean waiting until early 2022 then replacing the 11 with an identical model but with the A15, trimmed down to just black, white and red colour options. If it's under the SE branding at the same time as the 4.7" model it seems odd to have a completely unrelated form factor?
So the scenario you give is a more or less completely different phone, with a new form factor. Perhaps it would work, but what I don't understand with a 6.1" SE based on the 11 is what's the point over giving the 11 a $100 price cut as you’d expect at the end of this year either way?