The only issue with breaking backward compatibility is if someone overwrote the MODE command with their own /mode alias, expecting it to fallback instead of recur. [...] They SHOULD be using !mode when overwriting a command if it shouldn't recur.
This is a far bigger and more common issue than you may realize...
The help file is very clear that you should use the '!' prefix if you do not want it to be processed as an alias. The current fallback behavior is just coincidental since the removal of recursive abilities. Breaking this fallback behavior shouldn't be considered breaking compatibility, because it's invalid usage according to documentation.
The thing is, even though people SHOULD use the ! prefix, many don't, and so changing the behavior would indeed break many scripts. (The fact that those scripts can be considered incorrect is irrelevant when it comes to Khaled's insistence on maintaining backwards compatibility)
Keep in mind that this exact behavior was once altered during the "Error: recursive call" fiasco, and when this happened, you may remember that we saw hordes of people - notably non-scripters - complaining and submitting bug reports because their old scripts no longer worked. If direct recursion is implemented, the (unfixed versions of) those same scripts will break again, only instead of getting a harmless but annoying "* Error: recursive call", people will be treated to a potentially dangerous (e.g. risk of self-flood-off) command repetition, a possible temporary freeze, and the "* Error allocating stack memory" error instead. Quite simply, this is the kind of thing that Khaled, (and I'm sure many helpers/scripters), probably won't want to deal with again, thus the chance of this being done is virtually 0.
*cough* "compatibility mode: you know you want to!™" (o_o( )o_o) (o_o(
Ouims, everything aside, I don't think I actually understand your original suggestion.