The problem with your dragon form being unrestrained is if it can attack everything then your human form would be used less. Of course you would need to use it for caves and buildings and other interior areas. One thing that could be done is more anti-dragon zones be used. Not sure what the setting for the next game would be but I assume Damian would control most of Rivellon. If so most areas would have ADZ's, while you could bring most or all down you'd have to use your human form to disable them and then your dragon form could be used to fight the dragon defenses along with mop up anyone you missed. Another thing that could be done is you get an EXP penalty for using your dragon form on non-dragon enemies.