I'm also pretty sure, that CPU controller based on timeslice tricks behaves poorly on burstable load patterns as well and with interactive tasks. So before commiting I propose to perform a good testing on different load patterns.
Yes, it can only react very slowly.
Actually, this might not be that much of a problem. I know I can
traverse queue heads periodically very cheaply. Traversing both active
and expired arrays to requeue starving tasks once every 100ms costs max
4usecs (3GHz P4) for a typical distribution.