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.