I would simply force everyone within a 120 feet range to join turn based movement. This prevents exploits while still giving multiplayer situations enough wiggle room if they split the party. 120 ft can also be crossed in just 2 turns of dashing. I absolutely see no reason to maintain partial turn based combat with others moving around combatants freely.
+1
You're outside of the range when combat starts and you have to spend your first turn or two just jogging? Well, next time don't split up the party that much.
Yep. They should encourage the party sticking together with game mechanics anyway. BG3 won't be a successful "competitive multiplayer" experience even though screwing over your friends might be hilarious on a stream for a second. Before you have to reload. At it's core it's about working together and experiencing the story no matter how much "freedom" Larian wants to think they are giving the player. All mechanical decisions should be made with classical D&D party play in mind first, and pointless shenanigans second.
And you can always just Dash through the combat radius if you want to go do your own thing. Which seems utterly pointless in a story driven game.
I think more important than the radius is to put stealthed and invisible characters into turn based combat mode. But I'd like a range increase as well.