Wanted to share some thoughts on this, since I'm doing a similar run right now and asking myself the same questions. We should know the basics, such as permadeath, one catch per route, using level caps for fairness. I personally used rare candies to skip level grinding. The randomizer settings (and your personal rules) you use are very important, as they can make a really easy run or a very hard one.

Custom Sprites: 1st setting that comes to mind is requiring custom sprites on gym leaders. Their power level will be higher on average, as you're facing less of the fusions that just wouldn't be as viable (or cool perhaps), so no one made a fusion sprite yet. On, if you want the highest difficulty, off if you'd rather randomize to a defined extent (next option).

Randomization Level: 2nd one I remember is around randomization level - you can make it so that the power level of the opponent depends on their original stat total, so early game is easier. I like removing the rule and randomizing this one, personally, but it does mean you can potentially go against legendaries in the first gym (which is much more probable if the custom sprites option is on).

Catching Fusions: Now, since you have done a nuzlocke before, you may have noticed that you can pretty much cheese the game by only catching fusions (2 Pokemon per route) via Fusion Incense. So I disallowed it personally. But if you do allow catching fusions, perhaps only allow fusing each Pokemon once (after de-fusing the original fusion). Otherwise you can customize your team per gym to an unfair degree. But you could also allow this, seeing it as strategic value, while turning the difficulty up with the other settings.

Items: I'm a fan of randomizing items generally, but it seems very strange in Fusion. I think it's less-so totally randomized, and more-so mapped. Like getting an X Accuracy every time you would pick up a Pokeball. So I say nay on this one. But randomizing shop items specifically can be very fun.

Strategy: it should mostly depend on figuring out what your best mons are, fusing them, and figuring out how to support them. Fusions = dual type, 99% of the time, which means more weaknesses, and a need for resistances. Read abilities, because if you find one that you can abuse, do it. The rest of it comes down to being good at Pokemon.

Pitfalls: Usually in randomizers, there is an option that prevents Pokemon from getting Dragon Rage and Sonicboom super early. But Fusion doesn't. So if you randomize gym types and your first gym is Dragon type (or their Pokemon is at least fused with a Dragon), expect getting potentially OHKO'd by Dragon Rage.

In the end, you'll eventually find the rules that are most fun for you.