Alchemist's fire would have been the perfect way to use 'dipping' considering the poison bottles already in game work that way.
Yep.
Coating your weapon with poison or flames are very similar. They both cost a BA and last a few turns. They both add 1d4 damage (iirc) of the corresponding element. They both are widely used and resisted elemental damage types.
From the point of view of game design, of making things streamlined, intuitive, natural, consistent and systematic, it would have been better to have a poison bottle to coat your weapon in poison, and an oily flame bottle to coat your weapon in flames.
...
I could add that it would have been better for immersion. Indeed, dipping your weapon in a nearby flame and having it burn is highly unrealistic. It feels like an idea taken out of an old school point-and-click game where you had to combine items in some whacky, improbable fashion.
But I think that this immersion argument is a lost cause with BG3. I think it's better to focus on the game design.
