Hi Nitram. Of course I don't have any experience of this, but the function of the bush will be to support the outboard loads on the crank (outboard of the main bearing that is), which in this case effectively is the drive side. The primary drive will attempt to bend the shaft, and its stiffness will be affected by the fact it's now cantilevered instead of supported at both ends.
That will result in about twice the bending stress if my memory serves me right (and that's by no means guaranteed these days) based on simply supported beams supported at one end (cantilevered) compared with at both ends. Of course it's a lot more complicated than that, as you have various different forces applied at different parts of the shaft, but the principle remains.
Needless to say, it wouldn't be recommended to modify anything mechanical to the extent that stresses were increased, but if the outboard crank is very over-engineered, with a factor of safety far higher than needed, then it's perfectly possible for it to work without any issues.
Only experience can answer that, and if there are many who have performed the modification without problems, then that would raise the comfort level.
I take it there's not enough depth to fit a shorter bush and a seal, which might be the preferred solution?