A compromise is that the entire world freezes when combat starts, except players can finish dialogue/trading they've already initiated. And on their turn, they can teleport to the fight. This takes up their entire turn, having them effectively enter combat with a 1-turn penalty.

This is mildly unimmersive, sure, but emphasis on the "mildly." Importantly, it doesn't significantly affect game balance like how teleportal fast travel, unlimited long resting, and random encounters would. And it has a huge benefit for multiplayer. Imagine playing through DOS2 where you always had to play with your party, following the leader - it'd be so boring. This compromise is basically a QoL solution, allowing players to parallelize grunt work like trading/turning in quests/looting/exploring without too large of a combat penalty, for a small tradeoff in immersion (which, let's be honest, is already low enough: this won't make it that much worse).