Hmm, I'm not sure how feasible would it be the Limitanei to become a feudal levy. The thing about border troops is that they need to be full time soldiers because their role is to patrol the borders and protect the custom checkpoints.
On the issue of local defence, I'm not quite sure if the Romans would be comfortable with the idea of a militia at all. The Romans are extremely wary of allowing the private citizens to own arms, and there was never any official policy that supported militias. It would take an extremely radical shift in military ideology for the Romans to even consider implementing an empire-wide militia system.
Thy could evolve into part of a feudal style army. Of course we are talking about a different type of "feudal" system here resemblng more what developed in the Eastern/Byzantine Empire IOTL. It would be feudal in the sense that it works on inherited land in return for military service and tax. It would not be the Western European feudal system as it developed IOTL and of course troops would be trained professionals like the Byzantine army was.
It also depends on the extent to which the Germans influence Roman thinking. I can see Romulus' successors adapting their ideas to assimilate some of the Germans living on the northern frontiers ansd continuing to develop the Roman military in order to better combat German enemies.