I concur with what you have said. Having played the solasta demo, in which pop ups are used for reactions, they don't feel intrusive at all to me and combat still flows well in my opinion, but if people are REALLY against it for some odd reason, then having the option to turn off pop ups is fine I guess, but in order to run off pop ups without hurting yourself too much, having some way to further specify exactly when you want to use a reaction (or on hit effect) rather than just using it as soon as it is able to be used would be preferable, so your suggestion is good.
Specifically regarding on hit effects:
My interpretation of why Larian may find it difficult to have on hit effects as a pop up rather than picking them in advance, may be partly to do with animations. E,g. if an attack that uses divine smite is intended to have a glowy weapon effect, they can't have you swing a non glowy weapon - hit.. and then retroactively add the glowyness.. which I think is part of what the guy i nthe video was talking about with menacing attack "you can hit and then decide oh it was a menacing attack all along, and it works fine in tabletop because its all in your head" (quote from memory).. because he's thinking of you essentially rewinding the game to the start of the attack, and then doing some kind of special attack. The simple way to fix this is just to make sure that the results of the hit are calculated before the animation starts.. then pop up.. then run animation and roll damage.
Specifically regards to reactions:
The main argument I've seen from other players against pop ups is that in situations where you have a large number of possible reaction options you'll get a very large number of pop ups as all these events trigger. The thing is each character only gets one reaction per turn, so fi you are happy with the automatic route, where you automatically trigger the first reaction that is possible, then you'll at most get 1 reaction pop up each round per member of your party, not a big deal.. now my suggestion would be to allow the toggles for which reactions you want to take to work even if you are using pop ups. So lets say you're a wizard and you never want to take a normal weapon attack of opportunity, you could disable this reaction and NEVER get a pop up for it! Or if you have counter-spell prepared, but you're in a fight with a bunch of weaklings and don't want to get a pop up every time they cast gust, toggle it off. So you can combine the two systems to limit the number of reaction pop ups, without removing any player agency.
