In principle, I agree with toggles. However, I strongly disagree with your take on the relationship between toggles and balance:
But I would argue that the devs ONLY have to balance the game around what they decide are the "Normal" options as opposed to worrying about how each individual option affects balance.
In your scenario, the game is "balanced" around whatever options Larian decides on to be the "default" options. This means that the game I (and many others, as seen by posts in this forum) would *want* to play never gets created, because
turning on the options we feel would make it a better game would actually make our experience even worse by destroying balance.
In an exaggerated example, Larian decides on a set of mechanics that result in THE winning strategy to be a) gain high ground and b) explode barrels against c) mobs that you can only hit with Advantage or AoE.
Encounters are adjusted to be balanced based on that ^
Some sizable fraction of players find the fights in this game lacking tactics/not fun, so we change the toggles.
The result is: incredibly unbalanced encounters that could be
literally impossibly hard.
No improvement.
Simply adding toggles doesn't necessarily fix things. It is critically important to determine which toggles are on/off by default.
The only toggles you listed that should always be available regardless of balance should be:
-dialogue dice rolls
-companion romances
-interact with empty containers
