Age of Empires 4 also does this. It's very cool and saves a lot of space, but it does have some significant downsides at least the way its implemented there - you can't rewind replays, and they become unwatchable when the game updates significantly.

You can still rewind by storing checkpoints, resuming at the most recent before the seek time and fast forwarding from there.

The updates thing is a shame. You can store multiple configuration files for balance patches, but executable code is much harder.