Creating seperate "zones" like this poses a huge host of obvious, and unforeseen problems. As does any large change. SVC-599 could ensure privacy with a fairly minimal change to how SL works, and would be simpler to implement.

This is actually less convoluted when you think about it. It's an extremely common optimization in 3d games: instead of having objects that are never supposed to interact simulated in the same zone, the interior of buildings are disjoint (either separated in 3d space, or handled in a separate instance of the simulator) with portals to transition between them. It makes for a massively simplified physical and rendering problem.

The advantage of this solution to any kind of in-world privacy pockets or cloaking volumes is that it may be simpler to implement and would almost certainly be lower overhead for the sim, because it doesn't have to deal with special cases as objects cross parcel boundaries and are moved into or out of different zones as they travel. By making transfer between zones explicit there's no chance of collision groups intersecting.

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Also: "A landowner could place a house entirely in the privacy zone, with a simple single-prim model on the surface using llVolumeDetect... walking through the door would transfer you to the "inside" of the house." -> can anyone say TARDIS ?? ;-D

Putting the teleporter in a doorbell-shaped prim (with security scripting if appropriate) on a house-shell would work well too.

Unfortuntaley, it will also be possible to game or exploit this. SL does have fueds. If I fake-snapshot a major landowner or business owner in some adult activity, would LL ban that individual? Seems a dangerous road to travel.