Cavers construct similar things, in differing configurations.
Like one may be to tie an overhand off center and attach that to your harness (you'd have to rethread the knot to attach it to a climbing harness's belay loop) and use the two differing length ends as your two attachment points.
Some folks teach using a moderate length sling girth hitched to your harness, tying a knot halfway and attaching your abseiling device here, while using the end of the sling as a tether. The niceness when abseiling there is that if you wish to use a prussik, you can attach it to your belay loop and not worry about it hitting the device, which might look like this: http://alpineexistence.com/wp-content/uploads/2014/03/photo-2.jpg
Naturally there are a million variations, and as someone above eluded to people have been using dyneema slings, nylon slings, nylon ropes, for years and there's not much in the way of accidents from gear failing.
Personally I occasionally use one of the older metolius PAS (that don't pass the UIAA requirements come to think of it). I was OK with rope tethers for caving, but for climbing it's more bulk on the front of your harness, where you might be trying to also thread in two half ropes. There isn't a knot as low profile or as easy to add/remove when needed or not needed as a girth hitched sling.
As to your knot choice, it's a different loading situation to the commonly tested EDK so obviously those test results don't apply. I've generally heard it called a ring knot, and heard mention of it being used as a tie in knot: eg: 5th post: http://www.mountainproject.com/v/ring-bend-as-tie-in-knot/107108289#a_107108555
I'm not saying its safe, or unsafe. It's relative lack of use just means most people don't seem to know much about it, myself included.