I once made a thread saying it wouldn't work because of people like Bee who are immune to prolonged genjutsu.
So there is absolutely no possibly way every single person will be caught in that genjutsu.
My thread also suggested that all of this was because Tobi wanted the rematch of Uchiha vs. Senju, Sasuke vs. Naruto.
He said as much when he went to talk to Naruto, he said that they were destined to fight, so he was either lying about that or his plan, and for some reason I don't think he would tell his actual plan to the kage summit you know?
Everything points against him actually wanting to complete the Moon's eye plan other than the fact that he is collecting tailed beasts, which might just be used for something else entirely.
I don't know this whole war feels fishy to me.