For me, the situation with the Gnolls and the traders comes to mind. Without Dominating the female gnoll, my Tav I would've died, and the traders too. Also the cultists and their strange dwarf brother. They attacked me every time. Perhaps my Tav is simply less persuasive. I rarely select Charisma-based characters.
It's true to a certain extent, and it's a topic discussed every now and then at game tables as well; the main difference here is that using manipulative, compelling or restricting magic in self defence, in defence of one's life, or in the heat of combat is one thing - using compulsion to take away a person's free will actively, because it was easier than resolving the conversation or diffusing the situation some other way, is quite different.
I'm not sure about that. It seems a bit of a slippery slope.
Some people don't have the gift of gab, or the ability to persuade others effectively. That doesn't make them evil though for using the tools at their disposal. One could argue other spells which do not invade a person's mind could also be used in the heat of combat for self-defense and that the character is choosing to dominate a person rather than use a less will-invasive spell.
Perhaps it is a limitation of the game BGIII to not allow the characters to avoid combat nearly as much as might be possible under regular situations. We are somewhat limited in the dialog and scene options.