Well, this is.... interesting. Cant say much more on it just yet.
As I mentioned in another topic though, I think the terrain suddenly may have just become a major issue.
This sort of control scheme worked for Cave Story, sure, but there's one big, big difference between this game and Cave Story, and that's the level design. Cave Story, even in it's most difficult areas, tends to be made up of very open, very SIMPLE areas, with almost no angled bits (or small constrained tunnels) to speak of. That game really liked vast, open caverns. Not to mention that enemy patterns were also very simple in that game... it really was never a very hard game, even at it's most challenging (and enemies sure as heck couldnt shoot your attacks out of the air)
This game though? MOST of it is angled and constrained. 4-way aiming mostly works with that very open design; I can think of many situations where enemies may not even be able to be hit with various entire spell classes simply because of the terrain. And some spells probably just became worthless. Any spell class that's got too many straight-shot spells is likely no longer worth using, also. Actually, I can think of a few spell classes that I probably wont be using anymore with that change.
I dunno about other players, but I found myself using the angled aim *alot*. Now, granted, I always always play at high difficulties in games like this.... perhaps lower ones, it's not as necessary. But generally my experience is that to get through any given area without getting hit, likely, I'm going to NEED to fire at an angle at SOMETHING. And some enemies, depending on the terrain, cant even be hit any other way. Or even just depending on their patterns/positions (squids, balloons), as well as the caliber. Being forced to bring something like a snake or homing spell into most areas doesnt sound like a very good thing.
Again though, need more testing, but these are just some initial thoughts, so keep that in mind when reading them. I dont think any of this is going to break the game or anything, mostly I just think some classes and spell types might simply not work with that new setup. I'll give the game a full go later tonight. Not sure if I'll start a new world or not, I might.
Also I like the idea of the death penalty bit, among other things. Though, might that lead to players getting stuck in some situations? I'm thinking of research facilities here and the occaisional really screwy cave slice. But I like the sound of it overall. I've thought the game needed SOME sort of death penalty since the start.