I may be mistaken, but I thought I read somewhere that yes, Larian regretted the day/night thing, but such a detail was far more complicated than anticipated. Something was said about how it was like making a second game. I take that as meaning...well, we have the game during the day; when it's night (or transitioning), there'd be another set of scripts, behaviours, and dialogues to create. i.e, "This is how spell X functions during the day, always (and that is where we're at without cycles)." "But this is how it functions at night" is a whole new bag of worms that could double the amount of work for the same length of gameplay.
