I know i can do it, but is it a bad practice? It will look like this:
(System)TEMP -> E:\TEMP
(User)TEMP -> E:\TEMP
(System)TMP -> E:\TEMP
(User)TMP -> E:\TEMP
As always: it depends.
If your TEMP folder has an access control list giving almost all access to anyone on new files and folders and if there is a system process that is
then you might end up with a user being able to read this information. Or even worse with a user being able to modify this information. There are known attacks on Unix with processes using temp files and not handling them in a secure way.
So in my opinion it is not good practice to use the same TEMP folder for SYSTEM and users. BTW, why would you want to do so? And what about the LocalService and NetworkService accounts, why not change these also?
I would call it great practice, unless there is some confidential info that's to be stored in a user's temp folder (which is likely why every user has their own, and system has a separate one). It all should be deleted in the end, but that's the worst downside I could think of.