SaltShaker
In Zoning We Trust
Here's a counter argument to that-While I find custom variation to be a fun gimmick for casual play, I think it's a bad idea for competitive gameplay.
You main point is that everybody will focus on the strongest variation, but it will be the same thing for custom variations. A few months after the release of the game, there will be one or two optimized kits per character that everybody will use in tournament, so it won't really change from the current situation.
It will make counter pick unviable, unless you allow the players to set up 5 to 6 variations for different characters before each game. It will be quickly boring for both the players and the viewers.
It's also harder to learn the match ups considering there are a ton of possibilities for each character, I don't think it's fair to face an opponent with a kit you weren't able to study before.
Say Character X has 12 specials for Kustom. Now say the variation system breaks these into 3 base moves, and 3/3/3 per variation. Once player Y is using the character, it is true that he may say "I prefer to rotate these 8 moves in my kit depending on MU or stage, I don't use the other 4 ever". With so much availability, I don't see people exclusively using the same three moves only. Compare this to MKX, where the overwhelming majority simply played the strongest variation of a character. So many three variation characters ended up one variation characters. I'd argue custom will allow more moves to be in play from characters because they aren't restricted to variations. You also avoid the "after one nerf that variation is never seen again" aspect too.
Like the Rath guy said, it would have to be set at the character select screen before you go into the match in the UI. Kinda like how the old school games did it on the go when you selected grooves or styles or etc. Character - Moves - Stage - Fight. That way it can be quick, around the same as preset would be.
In the beginning of the game maybe, but 6 months later? I don't think so. It's only so many times you can face Kano and his specials before you have seen them enough times to know how to fight. And remember, some specials replace others, so you aren't learning those combinations because they don't exist. One of my main training partners in Tekken main's Lei, a guy who has over 200 moves, where over half of them are viable. Any MU played enough becomes experience. If you don't know the MU though it would have a bigger effect than what happens now, but I'm not sold it's necessarily a bad thing.
Ultimately if they keep preset I'll still play until the end of time, but I am definitely open to either option. I think NRS would be able to successfully pull off either (improved preset variation system of MKX history or succeed with Kustoms).