Bad, for two reasons...no 3.
1) It replaces something, that something usually would have some markup. A chance to recover some peds trading is lost. Some decent globals and HOFs are almost all schrapnel where they may have been containing items before. Even something like eye oil is much better IMO. It's loot with a 101% max markup replacing something that was better markup almost surely.
2) It's a way to keep you out hunting, spending your loot before you end the hunt and keeping any kind of track. IF you set out on a 100 ped hunt, get 80% return and half that is shrapnel...you'll more than likely use it in a 40% conversion and repeat that with any new shrapnel, end up in a reducing spiral until it's gone and you come home with much more decay and much less loot than if you'd just got the old loot. More repairs and less to pay the with.
3) Less materials for crafters, they can't use shrapnel AFAIK and if less is looted, less is available. Not good for them as the price should rise, and not mush better for those selling because they have less to sell. It's not about % markup for hunters, better 200 ped at 105% than 50 ped at 150% at the end of the day.
If it were an occasional extra loot it would be cool.