That's what I was thinking. Or something along those lines. I guess I should try it on one of my own sites and see ...
Yeh. The only issue I can see with it is that Google has purposely told her to pull a fast one on her link trades. It seems a tad deceitful to trade links, then later take away benefit while she is still getting benefit from their links.
If she has a page with 100 links on it. 50 of them internal and 50 of them external. PR is assigned to each link. Half the PR stays internal, and half goes external. She adds nofollow to the 50 external links. That PR evaporates. Vanishes. Goes away. It does not get redirected to the 50 internal links that remain.
She has always gotten full power inbound links. She still get full power inbound links, that hasn't changed. And based on how PR passes as I wexplained about, her internal PR doesn't change either..
That is all 3 year old thinking when people were PR sculpting with nofollow. It doesn't work that way any more..
Edited to add after reading more posts:
Now, if you actually "remove" those links, then yes, the amount of PR that stays internal increases because there are fewer links to spread it out to.. That is not what nofollow does..
A "Googler" actually said that? Or someone who happens to post in the Google forum said that? And if true, I feel sorry for all the chain link manufacturers, the people with golf courses, the missing link, and many more..
That said, how is the new page linked in her internal navigation? Did she block it in robots.txt? Did she nofollow the links on her site that point to her new links page??
See, this is an ENTIRELY different scenario that the one first presented..
Don't worry Tubby, this is what I sort of expected at the beginning. We "NEVER" get all the details up front. And the further we dig the more we see it was more than 'just' adding no follow to the links. She also deleted the old page and created a new one. Until that new page is crawled and indexed, she effectively deleted all those outbound links. Totally different than just adding nofollow to them.
And in a couple weeks when everything reverts back to normal (after the new page is indexed) she'll be back complaining about all her lost rankings and having no idea what caused them because "she didn't do anything".