Have three thoughts in mind
1. I like the idea of the Dimensional Merge in terms of story potential. If you dial the scope it back or simplify it, it could lead to some interesting stories.
Stuff like making friends with people from other worlds, trying to rebuild after the initial chaos has died down, trying to survive the chaos caused by people panicking, and the potential in terms of character interactions, especially if one was to do a crossover fic.
2. Were it not for Sonic Mania, Forces, and Frontiers reusing Green Hill, I would be down for an open zone game set on just South Island. Mainly because there's more to South Island than just the zones of Sonic 1. Along with the possibility of new areas, they could bring back zones from 8-Bit Sonic 2, Sonic Chaos, and Sonic Blast since they took place on South Island as well and it'd be interesting to try connect them together like Yellow Desert from Blast being in a secluded area accessible through a tunnel in Underground Zone from 8-Bit Sonic 2. Maybe the equivalent to Cyber Space stages could take place in the special stages along with Aqua Planet. Plus they'd be giving a spotlight to old zones from games forgotten by the public.
3. I do wish that Kirby got two attacks buttons in Forgotten Land. My biggest complaint with Forgotten Land is mainly the more limited move-sets. Though I understand it's for simplicity's sake, I still miss the moves that were removed from certain abilities in the jump to 3D and I feel that had Kirby gotten two attack buttons like in Kirby Battle Royale, we could've been able to keep at least some moves.