The biggest issue you could have is this changes how initiative will work. For example, if someone has a 'better' initiative and decides to attack someone who has not made a declaration, then the defender of that attack has the advantage of choosing how to react to that action. If that's who they will use their shield on, if they are going to parry or not, etc. This isn't specific to melee, but to any action where winning the initiative is important and how a foe might be able to react to it. Now, it goes both ways, so it is not really unbalancing in the long run, but it throws some uncertainty in 'winning' the initiative.
Actually, let me elaborate on that. We once fought a foe that should have been able to handily defeat us, but because we didn't know the rules quite well enough we employed a tactic that should not have been possible due to the rule of having to declare. The two fighter types in the group would wait to see who this foe attacked, then full parry, while the other fighter would then make an attack on that foe. Basically it lets us see who he was going to go after, completely defend and mostly nullify the attack, then let the other fighter go at him. This is not an unrealistic scenario, but it does change the balance of the fight.
If you are looking to shorten the round, but keep things a little more 'free' you might try the "BattleTech" round. No phases, all participants take movement from worst initiative to best unless the participant with the better one chooses to go first (so the better initiative can react to a worse one), then all participants take their actions, best initiative to worst (unless the better initiative wants to delay on a worse one). For snap actions you just give a -20 penalty and a bonus to initiative and for deliberate actions you have a +10 bonus and a penalty to initiative.