That will definitely work for the report_engine, but I am not sure how the SDP will respond. I do not know how the SDP locates the reports from the report_engine, but hopefully it asks the report_engine how to find them.
If you relocate the reports, I would recommend stopping the report_engine while the files are copying to the new location. Then update the config and start the report_engine. If you update the config and let the report_engine use the new location before you copy over the existing report files, you could end up with duplicate files like menu.html that would potentially need to be merged. I have experienced this before, and it is a hassle.
-Keith