I think it looks good enough to make a real attempt at using competitively. The same percent rules were always a pretty poor approximation of who is "really" ahead (heavier characters non-trivially disadvantaged by those rules, also didn't consider at all Nana's state which is super relevant in ICs match-ups), but they were a far preferable alternative to the awfulness that Sudden Death was before. I also firmly believe that it's important to try to play games in their "native" state, and since clearly this is an attempt to make Sudden Death competitive, we kinda need to give it a shot (and everything else clearly designed for competitive play for that matter). If it just ends up playing out badly we can always go back, but it would be a pretty bad call not to give it a real shot.
I'd also point out that fears about who stalls what out aren't particularly on point so far. So in general stalling for a time over is really common in competitive play if the time gets low. The current competitive rules mean that whoever has a lead has a strong incentive to do this, and since you can accurately gauge who wins in the end this way, you can actually take the stall strats really far out if you have a lead especially if it's not a small lead (a lot of Sonic mains make a career of this). Sudden Death when it's not RNG mostly reduces the stalling incentive because if you can win the match straight up it's a lot more reliable so if you know you're probably the stronger player or if you have a good enough lead that your opponent is in kill percents you should just go for it; why would you gamble your ability to win on landing a single blow if you have the ability to just win straight up? If you're losing and time is getting low but the stocks are even you probably try to run away since Sudden Death becomes your only real chance, but the guy who is already losing trying to run away is a lot less problematic. If there's too much time left it's pretty likely giving up offensive momentum just wrecks him, the fact that he's already losing means he's probably the weaker player and thus less likely to actually succeed, and of course the fact that he's losing means he's closer to actually dying off a single stray hit.
