The way I see it, there are three or four large issues with the camping/resting mechanic in the game as is:
Most glaring issue is the lack of a Day/Night cycle:
Sadly, Larian seems dead set against implementing a proper day/night cycle as in the original games. The reason given for this is to my knowledge what I consider a rather poor excuse to follow the DOS2 formula: That a day/night cycle would require a massive overhaul of the AI "living routine" akin to The Elder Scrolls series. This disregards the fact BG3 is a mostly linear game with static encounters unlike the vast changing sandbox that is TES, and a day/night cycle would ONLY require the illusion of passing time. The AI would largely behave very much the same, bar having the added potential of camp-fires and additional sleeping enemies (reflecting nocturnal/diurnal patterns). Encounters with sleeping enemies could be balanced with adding more of them.
This change would bring immersion to the eternal day, it would bring variety and new interesting tactical opportunities. It would set a sort of framework/suggested limitation to resting and thus also address some of the balance issues in a roundabout way.
Other major issues:
* How the camp is static and does not reflect your area, breaks immersion.
* How resting is virtually unlimited when the story impresses upon us we are running out of time, is a narrative dissonance that breaks immersion.
* How virtually unlimited resting in D&D where are classes built on a more restrictive formula, affects balance.
Suggestions for improvements:
1. Immersion/narrative dissonance. Camp could be explained to be a specific place, perhaps a pocket dimension, connected to a teleportation/dimension door device. This dimension could even have time flowing differently (ie. eternal night) that would also address the narrative dissonance of you resting and relaxing while the tadpole eats your brain/nethernese destruction orb beating in Gale's chest. Both allegedly ticking time bombs.
2. Balance. Tricky subject. Clearly an already relative weak subclass like the Champion Fighter compared to the likes of Battle Master, is weakened even further. Full casters are significantly stronger, but casters like Warlock less so. I would suggest balancing these directly by making some several abilities stronger than the rules.
I agree. the lack of a day night cycle is jarring.