Turn fighter 10 into Wizard 20 with no penalties before epic?
I don't know how did you come to that conclusion.
From what I understand, Fighter 10 could level to become Fighter 9/Wizard 2, right? So, then it goes Fighter 8/Wizard 4 (gaining a wizard level, then converting another fighter level), Fighter 7/Wizard 6, Fighter 6/Wizard 8, Fighter 5/Wizard 10, etc. until you have a 20th level pure Wizard.
It doesn't say anywhere that you have to change your most recent level, only that what you leveled up in most recently is what you would probably convert a previous level into.
So, yes. Fighter 10->Wizard 20.
EDIT: I don't know how you would adjudicate gaining spells in this way, probably just base it on your growing Wizard level. Either way, you can just spend money to get scrolls.
EDIT, the 2nd: I actually like that. Melee characters start to lose their pizzazz at mid-levels. Magic is really the only way to survive an intense campaign. So, abandoning martial prowess in favor of true power is flavorfully appropriate.
Just pointing out that this variant virtually replaces the improved casting rate that Ur-Priest gets, since you can just go full wizard before epic if you turn back before level 11.