That’s not really using the Earth’s rotation to generate power, it is just a roundabout way of converting rocket fuel into electricity.
The generator poles thing would probably need to be installed at both poles and then attached to the counterweight orbiting the equator to avoid pulling it out of alignment. Like the Earth is playing a perpetual massive scale game of jump rope. It’s not much less practical than the original proposal, but only because it is hard to come up with something less practical than the original suggestion.
We harvest angular momentum from the earth all the time. The reason we do planetary flybys with our probes are for “gravity boosts”, but it’s not actually gravitational energy the probe is harvesting, but actually angular momentum. The earth’s rotation slows down just an absolute miniscule bit, and the probe gets a bunch of kinetic energy in return. The energy is angular momentum, transferred via gravitational/tidal effects on the probe.
The closest we’re likely to get to “perpetual motion” any time soon is by harnessing the gravitation potential of the moon through tidal generators, or our nearest handy giant fusion reactor, the Sun, through solar power and indirectly through wind farms. And even then, eventually the sun will fade away, and the moon’s orbit will shift…
Knowing how these things tend to go, eventually the energy requirements of the human race will become so great that we’ll remove so much gravitational potential from our planet that we end up deorbiting it into the sun.
