I think it has the same effect as the "fleet Rome" variant. It will make Austria stronger.

Italy can start by opening Tus-Pie, and build a fleet in Tus while preventing France to build in Mar. This is a really strong opening if Italy can get the diplomatic aspect worked out. If it succeeds, he can get Mar+Spa in 1902 with a bit of luck.

The weakening of France will create more E/Gs, which benefits England. Russia will be much worse, because F/I will no longer be automatic allies, and E/G and A all get stronger. Turkey is harder to judge. I think it will do better, because there is no need anymore for Italy to play the hugely complicated Lepanto. I think there will be lots of midgame struggles between Turkey and Austria. Or A/T's that sweep the board :)

Italy will have to be played very differently. If it doesn't attack France from the start, he can always move an army to Piedmont or a fleet to Gol and Italy's in big trouble. So Italy loses options, which makes it worse. However, if the rush on France succeeds, Italy has an easier time holding on to its gains, and generally Italy can be a great midgame player.