While the idea of having to pick one set for ballista is interesting and forces players to optimize, it also makes the PvP system in this game a bit of a fringe event for players in my opinion. And having to go to a separate zone for it is meh.
I think it would be a lot of fun to have a one on one system that had gear swaps unlocked. But I do see the blinking being a huge problem for just staying engaged with your opponent.
It would be pretty fun to have a duel system you could use to just challenge players anywhere, or at least in cities. Even if the gear was locked, being able to smack at each other in front of random spectators would be fun.
Key word here FUN.
Open PvP is just a terrible idea. Reminds me of that south park episode, and there is no limit of asshats in this game that would love to troll people just killing anyone that came across their path.
I think one set of gear only is better than unlimited sets for PvP. This requires players to specialise and think about how to build themselves to deal with the majority of encounters and forced to avoid certain engagements, whereas allowing full gearswaps gives considerable bias to the player with the better gear (there should be some advantage to having better gear of course, but the use of different sets means there shouldn't be a universal best set, and a weaker set that is designed to beat your stronger set could then in theory beat you.
As for open world PvP, from my experience at least it isn't anywhere near as bad as you might expect. It would be difficult to implement in FFXI due to how the game's system works and how the maps are laid out, but I found I didn't actually get trolled much in PvP games, and it actually makes standard exploration and such more exciting.
For example:
You go to farm some Briareus Helms.
What's going to happen that is unexpected? Basically precious little.
Now you go to farm it in some mythical open world pvp area;
you have to keep watching your back! You never know when you might be ambushed by someone or a group and likewise you could prey on other people. It just keeps things more dynamic I find.