Wouldn't it interrupt the flow of vibrations through the wood of the guitar, by divorcing the string from contact with the wood?
It would need to be bonded to the wood for it to have some sort of sympathetic vibrations with the surrounding wood. If the wood is chewed up, I would suggest the application of a little wood hardener, or super glue to the wood around the bit where ball end of the string sits.
Different materials vibrate at different frequencies, so even if you substitute a piece of harder wood for the piece of brass, you would still have the same problem
Giok