I just read in Rav Kapach's introduction to his edition of Rav Saadiah Gaon's translation and commentary on Sefer Daniel that his grandfather had a manuscript of Rav Saadiah Gaon's translation which was punctuated with the Babylonian niqqud. This implies that his grandfather was proficient in the Babylonian niqqud, or at least had some familiarity with it. Were Yemenite Jews in general capable of reading the Babylonian niqqud system, and did they write in it, up through the twentieth century?
(Note: It might also be relevant that the pronunciation system represented in the Babylonian niqqud is similar to that of the traditional Teimani pronunciation in that patach and segol are merged into a single vowel.)