So in theory, yes, cars should be able to follow more closely without losing downforce... which should lead to better, closer racing, and more overtaking.
But yes, you'd still expect to see Mercedes first, followed by Red Bull. I think a lot of the Mercedes problems this year were due to how the changes affected high-rake and low-rake cars differently, which caught them out... so 2021 gave other teams a chance. Next year they could well be ahead again.
This is one of the reasons why cars are much faster in quali then the race most of the time (along with many other stuff like fuel load). So with these new cars, if you are 1 to 3-4 seconds behind, the car in the front won't slow you down, and you will have a better grip on the car and a better downforce when you turn and all of that equals to cars getting inches closer each second they race.