Literature request: Generating all vertex subsets of a graph
This does not seem likely to be useful in any application.  We already know of straightforward algorithms for constructing all vertex subsets, and they are are about as efficient as possible.  So, if you have a complicated way to construct all vertex subsets, that's not particularly useful, as it is a more complicated way to do something we already know how to do in a simpler way.  I cannot imagine any reason why an application would choose your method instead of standard methods.