Mechanical implications are definitely there, but are fairly limited...
Stack rather than Upgrade
There is a niche use-case building the Keep where it may be more cost-effective to Castle multiple Keeps than to build a single high-level Keep.
If you want to build a Level 5 Keep, it's going to cost you a total of 60Kgp. Or, you could build a Level 2 Keep Castled with a Level 3 Keep for 48Kgp. By doing this, you get 2 extra Units and 1 extra 'Size' (Health level, basically), at the cost of your 'Class Perk' being usable less frequently and a bit less toughness. Otherwise, you get the same +10 Morale, -50% Recruiting and Upkeep costs (note: assuming your DM lets those stack, and doesn't just rule that you only get the 'best benefit.' See below.)
This is not the case with the other 3 types. The price scaling on upgrading an Establishment negates this "exploit," and the Tower and Temple don't produce the same sort of passive bonuses that aren't tied to "whomever is gaining that Stronghold's benefits."
Infinite Morale Stacking
If all you do is remove the restriction on duped Fortifications, that means you're no longer restricted to 4 Strongholds in one Castle.
By the normal rules, a Castle with Level 5 Everything would grant a +20 Morale Bonus to its defenders. Unless you put some sort of cap on how many Strongholds can go in a Castle or otherwise limit the Morale Bonus--the Morale Bonus has no ceiling. Your players can get it however high they can afford to purchase.
But they could just build separately...
Yes, your players can just build separate strongholds...but each separate stronghold is in a different place, and thus must be defended separately. By making it a single Mega-Castle, you've made it easier to defend because you can mass your entire army in one place.
Additionally, if everyone has their Stronghold in the same Castle, that means everybody is within the 'Province' of their Stronghold, and can thus use their Demense Powers in defense of the Stronghold.
Finally, it lets you pool your Artisans. If you have 2 separate Strongholds and 1 Carpenter--only the Stronghold that has the Carpenter gets the benefits. By having a Castle instead, everybody gets to share each other's Artisans.
So, there are significant mechanical benefits to having a Castle that balance well against the +10% cumulative cost increase.
How big of a deal is this
Here we lapse into opinion from having messed with these rules for a while and run a game using them. In short--the balance problems that this would produce would be pretty trivial to solve. In a game I ran using this system, I permitted multiple copies of the same Stronghold type in a Castle, along with the following changes.
- Upkeep/Hiring discounts do not stack
- Morale boosts from multiple copies of the same thing do not stack
Other than those, the natural +10% per Stronghold cost for a Castle worked just fine to balance the rest.