I agree. I think it could be super interesting and refreshing to watch a "touch of death" version of USF4 but that still has the same mechanics and ground game. Especially if played at tournament level.
I know I will definitely lab monster the shit out of this mode and try to find the most busted tech with Omega Juri and Hugo lol.
From the looks of it, the average 2-3 meter BnB will do 50-60% damage easy. And with Super and/or Ultra that could go up to 75% or even 100%. Which is fine imo since to land anything higher than 50% you'll need more than 2 meters. When EX moves are that powerful it makes meter management a lot more interesting.
Also, I don't think it would necessarily divide the USF4 community. Because Omega is more likely going to appeal to players who are kind of tired/bored of playing Ultra. And players who dropped the game because their main character was overnerfed.