If 100% is powered up, it would be about 8% (the portion of the 9.5% going somewhere other than back to SP holders). With less powered up some of that inflation is borne by STEEM holders so it becomes less, the mechanism same as now (but vastly different in degree).
With these new parameters, the balance is shifted so that, with declining power up percentage, SP does not experience roughly 0% inflation (which currently occurs at 90% powered up) until only about 17% is powered up. With more than that powered up, there would be some SP inflation, but <8%.
I have no actual idea what percentage will end up powered up in this proposal. The lower SP incentive (lower STEEM inflation penalty) suggests less, but the shorter lock up period suggests more. So very difficult to predict (for me).
Thanks for the confirmation and the detailed numbers. Yes, as STEEM will have much lower inflation now it can be estimated that not that much will be held as SP (unless there is some other advantage for holding SP) and so SP inflation should stay at possible quite level.