Yes, sounds cool. But no pros without cons: Sensor noise (if exists) is transformed into jitter. Then you have to deal with jitter. And if ground loop results in superimposed noise, then this can also be transformed into jitter, especially if edges of PWM are smooth.

And: How to accomplish low pass filtering of a PWM signal if EMI is superimposed? Any low pass filtering would also affect slew rate of signal which might be disadvantageous. An analog signal on the other hand can very easily be low pass filtered, down to wished bandwidth.

Enormeous advantage of PWM is, that no analog cirucitry is needed. A feature, which seems to be very well suited for digital engineers...

Kai