There would be no deferring tax. You lose the tax deduction (the deferral) and only get the one time tax credit.
Suppose there was a 26% tax bracket, and ignore the existence of other tax credits that phase in/out depending on your AGI. If you were in that 26% bracket, is there any difference at all between a 26% tax credit on a $10,000 contribution versus a $10,000 exclusion from your income? Not really. If you're in a bracket lower than 26%, a 26% tax credit is better than a deduction, and if you're in a higher bracket the tax credit is worse than a deduction. You could say "you get a tax credit and then you're taxed twice" if you want, and you wouldn't be wrong, but when the credit is more than the first taxation you're still better off than a straight tax deferral.
Scenario 1: 24% Marginal Tax Rate at earnings/contribution and withdraw
Put $19,500 into 401k, get $5,070 credit while taxed $4,680 at earnings time.
Years later, withdraw $19,500 and pay $4,680 a second time (not to mention decades of growth that will be treated as income instead of cap gains)
Total Tax Paid: $9,360-$5,070=$4290+standard tax on any gains
Scenario 2: 24% Marginal Tax Rate at earnings/contribution and withdraw
Put $19,500 in after tax brokerage, pay tax of $4,680 at earnings time.
Years later, withdraw $19,500 and only pay cap gains tax on gains above $19,500.
Total Tax Paid: $4,680+cap gains tax on any gains
Remember to use the same starting amounts and units in both scenarios.
In Scenario 1, to make your $19,500 traditional contribution you contribute $19,500 of pre-tax money and then get a tax refund of $390 that you could invest post-tax.
In Scenario 2, you can take that same $19,500 of pre-tax money, convert it to $14,820 of post-tax money, and invest that.
Suppose that whichever choice you make, your investment triples in value by the time you want to withdraw it, with no dividends in between to make the taxable math more complicated.
In Scenario 1 that means you have $58,500 in your 401(k) and $1,170 in taxable ($390 basis). Remain in the 24% bracket in retirement (15% for capital gains) and you pay $14,040 of tax from your 401(k) and $117 on your capital gains, leaving you with $45,513 in your checking account.
In Scenario 2 you end up with $44,460 in your taxable account prior to withdrawal, of which $14,820 is basis. You'll pay $4,446 in capital gains tax and end up with $40,014 in your checking account after paying your tax.
Compare these to a Scenario 1a (tax-deferred 401(k) contributions under current law). It's the same as Scenario 1 except you didn't have the extra $390 to invest post-tax, so you're still better off than Scenario 2, but a bit worse off than Scenario 1.