At one point we were looking at moving a bunch of separate domains under a single dotless domain, due to the threatened death of 3p cookies, so that cookies could be dropped directly onto the cctld (think "you're logged into the entire TLD"). As the owners of the cctld it felt like a neat use that technically could work but ICANN and other groups are explicitly against that.
I think done well, AOL keywords are actually a good idea.
They could also cut down on the fraudulent websites out there.
Not sure how to fully implement it but given the safe browsing features already implemented in web browsers it could perhaps be part of that. Or a new TLD.
I imagine they'd have all the lovely problems of both EV certs (sure, you're legitimately PayPal Corp, in Malawi) and limited real estate price squeezes.
Curation of "good" or "real" websites has been tried before - I don't envy anyone that wants to try another go at it.
To me it felt very AOL keyword