Change is nice too. We've got an open office and we change desks 2 to 4 times a year. So far we're grouped only with other engineers, but even with a small team you get much more comfortable with the people you work in close proximity to.
Rotation is fine. It just goes on my nerves when management rotates people randomly to "improve collaboration". I am not aware that the VPs switch offices a few times a year.
I think if the team is small and synergy is good, then this could work well. Sometimes a bad apple in the bunch (aka The Talker) can really be a drag on productivity.
Slightly aside, I liked what Valve did, where they standardised on desks with wheels, and a single power and network hookup per desk. - Want to work next to someone, move your whole desk.
I was hoping that mid-range/business laptops would go in a similar direction with power-and-thunderbolt connectors, so you could have you monitors, network etc all through one connector, and just pick up your laptop and move to another desk.
It looks like we might be getting there with USB-C, but it seems much delayed to me.
