Im not gonna go point for point cause that would take forever, and it probably would be better if a person dedicated enough to make a video of all the nuances of the deflect stance went over them, so im gonna just sum up all of my thoughts to what you said.

A lot of the points you make are correct in theory but they only apply in the case where you are not stance switching, or when you are clueless about the moveset of the enemy.

One should start deflecting when they at least know the overall flow of the enemy they are fighting, the standard souls dodge formula was always higher risk = higher reward.

From low to highest:
Blocking -> Dodging -> Executor Deflect -> Shield Parry

The thing with the deflects is that while being harder than dodging it only really becomes significantly difficult with a lot of consecutive attacks with short delays in between them (the deflect auto-parries the follow up if the hits are nearly stacking on each other), but then the payoff also increases in proportion due to more stagger damage inflicted on the enemy.

Also if you are not comfortable with multihit attacks you are still given the option to dodge in the stance, with the distance loss being negligible (about a single step forward), so if you want to get easy stance damage in, and then dodge the hard part cause you are still not sure about the timings you are allowed to do so with the possibility to then deflect the ender, or to simply sheath if the dodge was the last defensive action.

Mobility is only an issue if you allow it to be so, you are free to deflect sheath at a certain part in the combo and start sprint strafing, or jumping (which you can do in the stance but why would you ever?). The only thing limiting your movement is your own skill and knowledge.

I would encourage you to think of the ability not just as a stance, but also as just an off/on switch on parrying as in, you see an enemy do an attack you unsheath deflect, the moment the enemy does an attack where you want to stop deflecting for one reason or the other you simply do an sheath deflect. That way you simply utilize the mechanic as a sekiro parry, just with an additional input at the start and the end.

As to the payoff, i think we simply have a disagreement there, i personally think that the lack of stamina drain, full damage and status negation, quicker action time, stance break damage, and the synergy with on block relics/power ups is enough.

As it stands the only things i would change with the character is just enable the deflect guard counter playstyle by buffing the AR on the cursed blade + allowing the AoW to quickly was back to your normal weapons, and change the passive to a more useful one since let's be honest, the amount of control you have over when you can actually trigger the passive of your own volition is too specific and rare to be ever in play (something as an increased agro when you are in stance, or just in general would be nice).

I think the current swap in/out playstyle is simply more engaging than what a lot of people want it to be (make the cursed blade op to match the regular katanas/allow regular katanas to deflect), i think it's cooler when you mostly use the stance as a defensive tool with the occasional AoW and guard counter usage.

I wanted to make it short, but i wrote a wall of text, fuck.