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Theoretically, yes, it would work; however, I would not recommend it as it has the potential for security issues and may add to administrative headaches and possible module incompatibility issues.
I believe you would be safe to use the same "system" module on all sites though. Just remove the symlinks to any other modules in the base files.
Also, if you plan to use customized versions of themes for each site, you may want to keep that folder separate as well.
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