I modeled a quick look using SPY, selling 43 DTE 1 407 and buying 2 377 but any variation like you describe would behave similar.

This trade makes money in three scenarios. On an upmove, or close to the money only if held to exp. On a very deep downmove past 350 (not 377), the trade passes out the backside of the valley of death and starts making money again. On an immediate crash move down with a big spike in VIX (like +10 or more) the trade will make money from the volatility spike.

The trade is not +theta, it's actually long vega to start and theta is negative. If the market stays at the money, it will flip after a few weeks as the odds of crashing past the longs drops near 0 it will behave more like a naked short put and eventually you hit the (profitable) expiration line. The model predicts that flip to +theta happening about 3 weeks out on my ~43 DTE example.

Generally, Put-back-ratio can be a cheap vol hedge but I don't think the trade will behave as you expect as an "income trade". Definitely paper trade it a few times to see how it feels.