If anything, they've proven the exact opposite. Dragon Challenge started to lose ridership as part of Lost Continent, and no one was riding it when it was in Hogsmeade. Cheap rethemes are never the answer, even with a popular IP behind it, and I don't think Rowling would even allow that again.You make valid points, and I see where you are coming from, however, it has been proven that just adding a popular IP, especially at Universal with Potter, you can make an attraction more popular. By no means is that all that they would do, I'd image the show scenes would be updated, as well as the way the screens are placed out, and the vehicles can see them. It would just be a semi-cheap addition to Diagon Alley, not unlike Flight of the Hippogriff at IOA.
While I understand that F&F is a profitable IP, I don't think this is a hill Universal wants to die on. At a time when the new park is getting pushed back a year for supposed financial reasons, I don't see ideas like this getting past the "throw ____ at a wall to see what sticks" phase of Creativing™.They essentially just don't want this attraction to be the only representation of the F&F IP in the park. Also, "London Suburbs" would just be incorporated to the existing London area, with dining and shops. In my opinion, however, this idea is a far stretch. I'm just reporting that it is an idea, not that it will actually happen.