This might seem ungrateful but I think the current experiment getting rid of encumbrance is a wrong turn in the game's development.
1) Encumbrance is a very familiar concept from other similar games
2) Initiative is not so intuitive to get your head around.
3) Removing encumbrance seems like a step in the direction of dumbing down. I associate Stardock with complex grown up games,
4) Encumbrance is logical, the more weight you carry the less agile you are. Agility isn't in this game. Initiative is, So encumbrance affects initiative. Initiative is the ability to begin and follow through an attack (in this game's context). The big flaw in the old removed encumbrance system was that the implementation was too clumsy - a few big big changes in intiative when certain levels of encumbrance were reached. The changes should have looked into this and smoothed things out a bit rather than removing encumbrance altogether.
5) Realism. I hate to use the word word "realism" when talking about a magical fanstasy game - perhaps I mean intuitive understanding. Everyone understands the implications of carrying loads of stuff and wielding heavy weapons while dressed in heavy armor. Think what might happen if you were wandering in real life through a woody area. A huge wolf attacks you. You have three choices, 1) Run away - you may not make it and be forced to fight or you may successfully get away. The game does not offer a comparable choice in combat. 2) Decide to fight but take a second or so to dump bags, backpacks, surplus weapons and equipent and objects - then fight the wolf and hopefully win in a weight optimal configuration 3) Decide to fight but go straight in carrying all that massively heavy baggage - after all the wolf might eat you before you get a chance to shed all that stuff. Now, if walking through that same woody glade you saw the wolf first you have a choice 1) Go straight in and attack while bogged down with all your junk. 2) Drop your junk, check your weapons and armor, tighten the buckles, sharpen the sword and when ready go for the wolf. Finally you wouldn't really be walking through that woody glade in full battle armor and ready for battle. You would be in comfortable day wear most of the time, carrying armor and weapons in a backpack of some kind. You would only be battle-ready when expecting trouble.
So I am saying there is a TOTAL or NON-COMBAT encumbrance, and an optimal BATTLE-READY encumbrance. In the first round of a combat (or even in subsequent rounds) there is a once only choice about whether to wade in and fight or shed some weight and get into battle gear to be able to fight better but maybe take some uncontested damage whilst doing so. In combat there should be a “run away” option – success depending partly on weight carried. Finally and most important the actual mechanic of how weight affects the ability to respond in a fight (initiative) really needs some work.
6) I didn’t like encumbrance as it used to be in this game before patch 0.80 but I really hate the fact it has been taken out.