No, I think that this is very bad.
1. You get an inexperienced Captain on the left seat, and at the end of the season an out-of-practice First Officer on the right seat. Not a safe-and-smooth thing to do.
2. The guy who has to return to the right seat at the end of the season certainly won't be very happy about it. This may also cause CRM-problems later on.
If it is normal practice in the USA, it shouldn't be an example to any other companies elsewhere. The CAA is absolutely right to prevent such a thing from happening.
IMHO, if an airline believes a First Officer to be ready for upgrade, then he/she should be made a Captain, and a new guy employed to take the FO-position.