Being able to adjust the encounter rate seems nice, especially if it's just from the menu, but it's...strange, very very strange. Talk about a massive disconnect of gameplay. If you can create a good way to have it "make sense", then that could be cool, but, eh.
But, it does defeat part of the purpose of the game.
"Random battles are annoying. "
-Boss fights can be annoying too! Why can't you skip those too!?
-Walking around the map is annoying, teleport anywhere from the menu!
-Going through towns is annoying, how about a menu that has each shop or inn?
-Oh, so there's hidden items in the town? Eh, just have a menu that lets you select each item and receive it, after all, exploring looking for items is annoying too, right?
-Shops are annoying too. You have to pick items and compare them to what you have. Also, they cost money. Why aren't they all free?
-Story is annoying, cutscene skip isn't good enough, I just wanna see the ending NOW.
Some exaggerations of course, but my point is that it's "dangerous" to start taking core elements of a game and letting the player do whatever they want with them. Using these creatively? That would be awesome.
-Maybe you have a character with overpowered attacks that come at a great cost (think Breath of Fire Dragon Quarter, or heck, even Spawn!) so you can bypass some bosses, but it's very costly, as in costs something you can't recover.
-Teleporting is fine, it cheapens the exploration a little, but eh. Just try to make it seem impressive, not just some random ability you learn for no reason.
-Having a tour guide in each town or something that quickly takes you to each building of interest? Why not!
-Maybe you can pay someone, like at a thieves guild or something, to scour a city and bring you back anything of interest without you having to search for it.
-Want to shop for free or something? Maybe you can buy a store, and just take whatever you want after that.
-Going with the uber-boss slayer skills, what about a character that can bend time and reality to instantly clear the story? I don't know.
And finally, for avoiding battles...maybe a monster charmer or beast tamer has skills that alter the encounter rate. There's items too of course.
I just don't like how features are just flavorless menu options, and people seem to want that. It's like the menu having a few leftover debug features.