Yes, this will benefit pirates. And yes, it will make carrying more gold a more viable strategy. In fact, the reasons NOT to becomes too weak. For large traders, carrying lots of gold will become a dominant strategy, I fear. Even more so if booty master is capped. Booty masters need to have no limits, to make people be wary of carrying VERY much gold. Not only regarding plunders, but also to make people who get huge national payouts vulnerable.
As for plunders, the gap between a minimum defence and an amount which will give the max payout will be very small. So small, I fear, that carrying lots of gold is the only strategy left. That, or carrying only level 1 howkers and no gold, and hope people won't bother attacking only to gain level 1 howkers.