About battle mode...I haven't had the chance much to test with many players, only very experienced testers in private tests. I wish to give it a bit more time before re-balancing, though so far in my experiences, SMS has come out balanced to underpowered in actual practice. For example, I don't think the Haymaker will be nearly as much of an issue in the long run as it is in your first impression.
Whether you dodge the haymaker isn't a reactive thing, it's a predictive response. It's always the same button inputs, and you can mash the jump+spin with no punishment even before the prompt shows making lag a non-issue. SMS players show very telling and repetitive behavior when they're setting up a haymaker, which I'm 100% certain you'll learn to recognize if you're getting irritated by how often players try to spam it if think they can get away with it. When you consider SMS drains rings to boost at all in Battle Mode, risks running into spinning players/projectiles/traps(which you really don't want to do when you have 1 hit), and is vulnerable after the attack. The haymaker is an awesome surprise attack for players ignoring you with a huge payoff, but once muscle memory and caution set in for other players, it's very ineffective and needs to be used sparingly.
Assuming everything you say is true, then the haymaker's effectiveness is inversely proportional to enemy awareness. I would raise the counterpoint that this further encourages SMS to feed off of less-experienced players, which breaks him in battles with higher player counts.
Meta aside, my central complaint is with the QTE, which simply is not an enjoyable mechanic for Battle's gameplay format. The balance aspect, while serious, is still less annoying than the actual QTE itself.
HMS is absolutely broken, but does come at a cost even if you succeed. You can't casually pick 300 rings up over a long game or snatch them all from some player like emeralds. You have to be SMS for a long time, actively avoid getting potential points from risky fighting, AND survive an entire server hunting you down if you get 200+ rings. Now you do all that, and you successfully outright murder 3 people as HMS despite them running and hiding those 20 seconds. That's 300 points gained. Despite 20 seconds of complete domination, the gains aren't that huge compared to the risks. And yes, a bigger server means bigger point rewards for HMS, but that also means less rings to collect and more risk of losing them. I definitely gotta make him unable to use control points, though....
I think even if you make HMS incapable of capturing points, this would still be an issue in Team Control Point, because while HMS is tossing up a storm, the rest of the team can use those twenty seconds to get an easy free capture. TCP is also the sort of environment where it's easier to gain HMS, because the mode's mechanics encourage players to focus less on each other and more on the objective. Since most people use the resting periods to replenish their resources, it's the perfect format for SMS to farm rings behind the scenes whilst avoiding conflict as necessary.
This is not to say 300 rings isn't a huge barrier, because it certainly is and it makes the transformation that much more eventful due to its rarity. The reason I recommended reducing the duration rather than the lethality, is because I'm totally okay with HMS wrecking face; I just think the duration of the event should be moderated so that it doesn't disrupt specialized mode objectives as severely.
And finally SMS, definitely the most dangerous character on the field when transformed. But that does go both ways. As just Sonic, he's slow and can be easily chased and bullied into constant submission with very little in the way of fighting back. You could be combo'd by a really skilled player just as a skilled SMS might get alot of use out of his powers. But right now, I most often see people become SMS, and get 1 or 2 hits in before detransforming. The person who hits you get 75 points, and for the 30 rings it takes to go SMS, I'd say you need at least 150 points to really say it was worth it. I think the biggest risk of a balance issue actually lies in the charging flames, which lays fire traps and is a competent explosive projectile at the cost of 5 rings. But when the broken elemental shield exists, I'm not sure yet.
I think SMS in theory has all the potential to be the most broken of the "balanced" cast, but especially right now, people are far too clumsy to reach up to that. So I want to see how this goes in practice a little longer before rushing into changes!
See, that's totally fair and I don't particularly disagree with this assessment.
Up until now, there has only been one Battle character who has held such an emphasis on extended periods of downtime and uptime -- and that character is Eggpack, who requires 60 rings and preptime in order to get a powerful sentry turret that lays waste to the surrounding area and just causes all sorts of ruckus. But whenever that sentry is down, Eggman is just a big lumbering oaf that players can just throw around if they happen to catch him.
SMS in Battle is an amplification of that sort of character archetype, where his stock Sonic form is a literal nobody; no abilities and a more garbage thok, and
then you get the powerhouse of SMS, the objectively most powerful character in the game but with the worst survivability. The thing I especially love about the execution of this is that base Sonic can still keep shields in stock! So there's a strategic element here where the player can choose to preserve his rings and instead rely on his core/shield abilities for as long as possible, only transforming when the moment is right or Sonic has lost all of his shields. I sincerely do love this sort of game design, and I think this particular aspect of SMS is executed quite well!
At the end of the day, I think that the challenge SMS is faced with in terms of mode balance is that his toolkit is
extremely vast -- and as players continue to exeriment and adapt, dominant strategies begin to emerge. Enemy players may adapt, but even as they do so, they still have to contend with the fact that SMS has more options than anyone else in the cast. Therefore, I think SMS will inevitably stay on top of other characters' attempts to adapt simply because SMS is the most adaptable of all characters.
This is all fine and well so long as every tool in his kit has adequate counterplays or limits. The reason why so many players are faceplanting as SMS at the moment is largely due to the complexity of his toolkit rather than any sort of incompetitiveness on the characters' part. I have played Battle servers as Fang in a sea of SMS players and occasionally have come out on top -- but for every one time that I do so, there are multiple instances where one SMS player gets 4x the number of points as the next best player. As a non-SMS player, I cannot catch up to SMS's sheer speed, and so if SMS chooses not to engage with me, then there is nothing I can do to pick up the lead.
I think it's totally fair to wait for more data to come in before making any adjustments. But please take my above recommendations as possible pressure points in the character's design to watch out for -- in particular, I believe denying SMS from receiving a +25 bonus for hitting other SMS players would encourage them to engage more frequently with non-SMS characters. Second, Comet Haymaker appears to be the most obvious point of polarity, so its current PvP interaction at least ought to be reconsidered. The rest is largely tertiary.