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Yeah, if you like the concept I think it would be improved by replacing the slotted component with a shaft, and having the shaft pass through a sleeve/eye. Much less difficult to fabricate and less likely to bind anyway.
The idea would be that an upright shaft attached to the axle (in the same way as the slotted component in your pic) can slide freely up and down in an "eye" attached to the chassis.
The eye would be able to swivel to allow for the upright shaft's changing angle, but wouldn't allow the upright shaft to move forward or backward.
Same basic mechanical principles as what you've posted but I think stronger and definitely easier to fabricate.