Cool idea. I would really find this useful. Sometimes it would be helpful to use it non-destructively, such that the original notes/cards are preserved. This would be especially cool if there were links added to both the original notes/cards and the resulting composite. It would make creating drafts quite easy. And since the drafts would be actually made up of the original text (as opposed to embeds), you wouldn’t feel too hesitant to edit the parts, once the draft had been created. This is not to say that the system would be perfect. But, as far as I know, it would be considerably better than anything that currently exists at creating these types of snapshots. There is the Longform plugin. But, it doesn’t natively let you work visually the way canvas does.
Potentially this could be a plugin idea, as well. I could imagine something that automatically would recolor the resulting composite nodes. Another thing to consider is whether sometimes it might be easier to layout this hierarchy in a single note. This note could be converted to canvas form (see below), then you could more quickly get started. Eventually, when the idea was sufficiently developed, the canvas nodes would be converted back into a draft outline. Ideally, the original outline, and all the later resulting drafts could be kept in connection with eachother (or perhaps metadata could be managed such that a dashboard could be automatically generated). Along these lines, it might be worth checking out this thread for some pretty amazing solutions: Dataview JS Getting The Tree Root. Following are a few more relevant things.
Feature request for easier combination of notes: Note Combination (could be useful assuming you are using actual notes within the canvas)