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I live in South America where we don't have substantial supply of modern two-wheeled cargobikes in the market at reasonable prices, so I think converting a tandem bike by dismounting the stoker seat would be a good idea to have more place to put saddle bags. Also it would deter thieves from taking my highly customized, weird and hard to sell bike.
What would be the advantages and disadvantages of such a conversion, compared to a cargo bike?
If you want to have a real cargo bike, e.g. an "inverse Bullit-style" the challenge will be structural integrity of your frame: you can't easily cut the 2nd diamond of your frame without risking to break the frame.
However, I don't see a problem with removing your back saddle, cutting/removing the back cranks and building a sturdy plywood/mdf cargo hold left and right of the frame/using bags to attach. You could still haul a ton of stuff but would have the frame in the middle. In fact, there are quite some people that have done this before.
I have tried doing family cargo bike with a tandem, and had real stability problems due to the high center of gravity and placement of the weight, see https://bicycles.stackexchange.com/posts/comments/151941
I found that putting a trailer behind a regular bike, while slower, is much more stable and maneuverable.
