While underwater, Metal could have quadruple the time before his countdown starts ticking down to him "drowning". The downside is he can't take in air bubbles, so he's still encouraged to progress through water sections quickly. The only way to feel more safe would be to take advantage of the infinite breath provided via shields such as the bubble shield.
Metal Sonic is somewhat overpowered in the current version on account of his hover ability, which allows him to skip vast portions of levels without fear of falling.
I like the thought behind the idea, but this would make it unreasonably difficult for Metal to beat Azure Temple.
Tails and Knuckles both are able to skip large swathes of level design even more frequently than Metal, due to the fact that they have the ability to ascend. The only other difference between Glide&Climb/Fly and Hover is that Hover allows Metal Sonic to stay in midair indefinitely without the player grounding himself -- even still, Knuckles can effectively do the same thing if he has a wall surface to cling onto (which tends to be the case).
You could argue that the hover stacks with his dashmode ability, but then, still, Metal Sonic lags behind Sonic and Tails when it comes to speedrun times. This could be because his meta is underdeveloped, but if he's as broken as I've heard people say he is, then the records have yet to reflect this.
This raises the question: if some characters can skip more platforming than Metal, and some characters are more effective speedrunners than Metal, then what metric are we measuring Metal Sonic's character balance that would implicate the hover ability?
The one area where I have seen Metal Sonic do more work than most other characters is in CTF, and the reason for this is simple: it's not because he's as fast as Sonic, or as oppressive in the air as Tails, but because he is adaptable. You could also argue that being one of the only two characters which can go super is also a big boost to his playtime aggregate in coop netgames, particularly since the innate hover makes him far less of a risky choice for players with high latencies. Those are really where his balance issues start and end, however; I think it could be argued that Metal Sonic is one of the more balanced characters in the game alongside Knuckles. His current design essentially makes him "jack of all trades" character with good speedrunning, platforming, and combat tools, yet not necessarily being the most powerful character in any one category.
I'll note that I'm not necessarily arguing against changing the hover ability, but it's important to clarify what we're intending to achieve here. Are we intending to make Metal Sonic less powerful, or do we simply want him to be more challenging and/or interesting to play? We could, for instance, aim to make his hover harder to use, while also making tweaks to the dashmode to make more accessible or less dependent on the level design. After all, it is a bit ironic to me that Metal Sonic's gameplay was birthed as an attempt to make a speedrunning alternative to Metal's gameplay, while Tails' buffs resulted in both of them being outperformed.
Tails and Knuckles both are able to skip large swathes of level design even more frequently than Metal, due to the fact that they have the ability to ascend. The only other difference between Glide&Climb/Fly and Hover is that Hover allows Metal Sonic to stay in midair indefinitely without the player grounding himself -- even still, Knuckles can effectively do the same thing if he has a wall surface to cling onto (which tends to be the case).
The reason I feel Metal's glide is overpowered is because while Tails has more vertical mobility than him, Tails grows tired after a few seconds of flying and as such has a strict limit to how far he can travel like this. Metal has no such limitation. Knuckles loses height while gliding over time. He can counter this weakness by latching onto walls as you said, but he cannot do this with every wall. Metal has none of these restrictions. As long as he can manage to reach a height somehow, he can keep it for as long as the player needs him to provided they don't lose too much speed. Even if they do, they are only punished a little bit by him losing a small amount of his height.
This effectively makes Metal's playstyle dominate over anyone else in the game in terms of general usefulness in the highest number of situations. He struggles heavily to gain as much height as Tails in most situations, but dominates in every other area, at least in regards to safety and ease of progression if not always in regards to record attack speeds.
However, I am not entirely against this. To even play as Metal, you need to clear the entire campaign at least once. As such, the superior mobility the glide gives you feels properly earned as anything it allows you to easily skip, you probably had to do the first time through legit. That's why the only major balance change I would make to it would be to limit the slow fall to his Super Form.
Overall my mindset isn't so much to necessarily make Metal less powerful so much as make him less safe, or in some situations just more unique. I actually do quite enjoy the hover as it exists now, abusing it can be a lot of fun. However, I feel like it can sometimes make things too easy due to the safety it provides, which in turn makes Metal a bit less fun to play once the novelty wears off. Skipping huge sections of AGZ as Metal with little risk for example is hilarious the first few times you play through taking different pathways, but after a while I would really rather just go through as Tails or Knuckles or if I feel especially brave, Amy.
Levels like DSZ and ERZ are where my mentality shifts away from focusing on making him less safe and more on making him more unique and in line with the concept of him being robotic. Part of the mentality is if you are going to acknowledge it with an aesthetic difference, you might as well commit fully and go full dive into it by making him play like a robot too. The other part of the mentality is that by doing this, Metal would become more unique as a standalone character because nobody else would react to these situations like he does.
Being a robot, it makes sense that he doesn't need to breath. However, it also makes sense he wasn't actually designed to function indefinitely underwater or in a vacuum, and starts to suffer internal damages as a result. His durability in these situations would likely be higher than that of the common fleshy character that needs to breath, but on the other hand all the fleshy characters need to do to recover is take a breath and they can hold it, while Metal is unable to do this. That was the concept I built my suggestion around, being careful not to make him too overpowered by introducing a drawback to his longer breath times while also being careful to make that drawback something that makes sense for him as a robot. There could be other ideas that would work better and still remain consistent with the robotic theme, but I feel like aside from situations like the current version of ATZ I took a pretty solid stab at the idea (Actually I completely forgot about ATZ when initially writing down my idea, how silly of me).
Knuckles has to jump (lowest jump in the game), find a climbable surface, jump, start gliding, and still loses height at a consistent rate while doing so. Ending glide at any point forces Knuckles to start back at 0 speed.
Metal Sonic has to find a position higher than the rest of the level, jump, start hovering, and the level is effectively over. The speed at which you lose height is negligible, the air-control allows you to maintain a constant rate of speed with no loss, and is even coupled with gaining more speed on landing.
Playing as Tails requires you to mash the jump button constantly, manage your height, and has limited use.
All three of these characters can spindash.
I think simply nerfing float would be a huge mistake because Metal's just kind of weak in general. The problem I have with it, and the reason I think that all of the people that dislike it want it nerfed, is that it's strong in comparison to Metal's supposed draw: his Dash Mode ability.
Dash Mode is extremely weak, as it takes just slightly longer than expected to charge, and Metal has no abilities to get over many of the 128 unit tall "haha, gotcha, thought you could get over this" ledges in the game. Most of a casual Metal Sonic playthrough consists of getting Dash Mode, then losing it as soon as it's ready. Dash Mode increases his jump height deep into it, but it's wasted, since you often don't have it for long enough to feel that benefit. He's not really usable in a casual, full-game playthrough setting.
The difficulty of building Dash Mode in a normal playthrough is one thing, however, let's say you instead use him to grind up perfect runs in Record Attack. After having labbed many of the game's levels since v2.2's launch, my conclusion was: in most levels, floating to skip content and flat-out ignoring Dash Mode is the best option a majority of the time. I feel like the intention is that the player is meant to decide when to build Dash on the ground and when to float over troublesome platforming. However, Dash Mode just isn't strong enough to actually make it a meaningful choice. It's far more effort than it's worth to build Dash Mode, and it's more efficient to float over things at every viable opportunity.
This brings me to my actual complaint with Metal's float: it's not that it's too strong, but rather it's boring. Compared to Tails' flight, it doesn't have a timer or any other form of resource management, thus can be used forever. Bumping into walls and losing speed only matters in extremely rare circumstances; due to SRB2's bizarre acceleration curve that gives you higher acceleration when moving faster, you don't go below the speed threshold for any more than a second. Unlike flight, it also doesn't let you backtrack and explore as much of the level as you want, which means its use is strictly limited to skipping content whenever the level design gives you even a tiny height advantage. In the end, float doesn't serve multiple purposes, it can't be used in multiple ways, and it doesn't take any effort to utilize, so it feels very binary and simplistic. It's not even a concern to me that it can skip content if you get a height advantage; I don't care either way, frankly. The point Chrome was driving at was that Metal Sonic's float is not interesting or even committal, which makes its easy-to-use nature that much more boring.