First of, i never siad it simulates skill progression, it just simulates that you HAD an encounter and i think i DID write that you can choose to fight every encounter on the way YOURSELF too.
Apologies for the skill progression; after giving it a second read, I'm not sure how I got that out of it. Perhaps I simply read Daggerfall and interpolated skill improvement on my own.
However, even the optionality of bypassing encounters still has a ProgressQuest feel to it. I can either do things myself, or I can hit a button and have the game do all the work for me and calculate out the end result, essentially turning the encounter into a Zero-Player game.
Second, I did write "Paying however wouldn't automatically mean you get out of it free." so bandit encounters are sometimes NOT solved by paying.
Missed that as well. Further apologies.
Third, the "waking up after being beaten down" IS meant to prevent frustration and using fast travel getting punished, and i didnt say "you wake up in the next settlement", i said somewhere on the side of the road with a CHANCE to make it tot the next settlement.
Where it is that you end up, all beaten and barely alive, is of little consequence, really. I just used the PokeCenter as a convenient example. Waking up near-dead on the side of the road doesn't change the illogic and complete unbelievability of never dying as the direct result of a simulated encounter, ever. That you might die from your weakened state trying to get back to the nearest settlement is irrelevant. If we are to simulate events in which death is a very possible outcome in realtime, then to not simulate the full spectrum of consequences for that realtime event is to not simulate the event at all. Hence why every encounter with a possible realtime-death-outcome should be an interrupt to the FT process.
Fourth, having both systems DOES WORK as each has it's individual advantages and disadvantages. Walking by foot for example you are limited to your carrying capacity and you are a lot slower, if missions are designed to have more time limit issues this IS a point to considder. A payed travel service is faster and can transport a lot more inventory than going by foot.
I admitted that a heavily modified OB/DF system (which is essentially what you are arguing for) could very well potentially mesh with a MW system. I was simply noting that a completely unmodified OB system could not mesh with a MW system, as there would be no resolution to those advantages or disadvantages that you speak of.
However, I must note that things being "a lot slower" in an instant travel environment are only given weight by them reinstating timed quests, as you mention. And that's a whole other argument, but I think it's safe to say that such things are not likely to see the light of day again, for good or ill. The last Bethesda game, let alone a TES game, to have timed
anything was Daggerfall. Their broad design decisions seem to have eschewed that style of play.
EDIT: Correction: The last Bethesda game to have widely-implemented timed anything was Daggerfall.
Further, a FT system that can transport more inventory than what on-foot could seems a bit superfluous, as you're still limited in what you can carry when approaching a caravaner or ship-owner. Unless I'm misreading your ideas on how such travel methods would be utilized.
I know what you want is an immersive system but you also need to remember gameplay decissions and what is simply a frustration factor.
I can recognize the eventual need for gameplay decisions undercutting logic in some cases, but mechanics that break immersion simply for the sake of avoiding frustration speak of a higher design problem than the specific mechanic itself. Metagame mechanics should be avoided as much as possible.
Also, another thing that I forgot to bring up regarding simulated walking: Is the player going to simply be selecting their destination and that's it? Or are they going to draw out their route on their map? If it's the former, then the game is basing its simulated encounters on some form of assumption of what route I am going to take, most likely being a straight line if there are no roads involved. That presents other problems; what if I'm in the middle of a wide roadless wilderness and want t cross it, but I want to avoid specific regions of that wilderness that I know are tougher than what I can handle? If the game is doing a straight-line path, and those regions just so happen to be on that path, then there's nothing I can do about it.