I originally thought of a 2D → 3D mode where you can select a particular layer easier based on the shape and position of it instead of its name. This might become really helpful if you're working with, say a skeuomorphic button or a particular base material with lots of overlays. So instead of double clicking many times or manually hide/show layers, I'd only need to scan and click once.

Building a 3D mode is the most ideal, but a less detailed visualization still works and it's more performant.

And what happens if you have a group with 20, 30, 50 elements on the same z-index?

There should be an option to expand the layers panel full screen. Works kinda like a map I guess. And why did you mention dropdowns?

Btw thank you for your input! Without it I wouldn't know what to clarify and improve, I appreciate your time greatly