BIAB using smaller kettle, adding top off water to fermenter???

I have done a couple BIAB batches in the past using the "standard" BIAB methods. I was wondering has anyone done a BIAB using a smaller kettle lets say 16 quart making a concentrated wort and topping up fermenter with water to desired volume?

This weekend I'm planning on brewing a 3 gallon batch and thought about mashing all my grains in a 16 quart kettle. Possibly needed to use sparge water to gather approx. 3.5 gallons of wort. Boil with additions like normal probably ending up with 2-2.5 gallons and then topping off fermenter with clean water to total 3 gallons.

I guess it would be similar to an extract brewing directions but using grains instead of extract?

Will this work? Are there people currently using this method or am I off my rocker on this one??

Google maxi BIAB. Sound's like what you are describing. The method I looked into included doing 2 sparges and then topping up with water in the fermenter (post boil dilution). This particular example used a 19 litre brew pot to produce a 23 litre batch.

Try here:
Using Maxi-BIAB to Brew a 'Single Batch' Mini-BIAB.

Yes it will work fine...sparging will help efficiency rather than adding top up water if possible...even cold water sparging will work. The bag can be dunk sparged in any type bucket or pot FWIW.