The problem with halting logon if both your nicknames are in use is that your client will not log back on until you manually intervene, eg. if you are disconnected while away from mIRC, your client will never log back on. I don't know how common this situation is, however it was one of the considerations.
Right; as strange as it may seem, I never considered this a "problem"-- this was always the behaviour I personally preferred. I want
to halt logon if both my nicknames are in use, because as I mentioned, this usually means something is wrong (I'm either connected or someone is using my nicks). In either case continuing a connection with a nick I did not specify is problematic because it screws up my nickserv authentication and channel setups. Basically, this might seem like an extremely black and white attitude, but if I can't get on with the nicks I specified, I'd rather not be connected at all; I'm going to have to reconnect when my nick becomes available anyway.
The specific issue that ends up happening is the following: when I connect to a server without authenticating, my nick is missing certain privileges that messes with my channels-- namely channels that are +m disallow changing of your nickname if you're not authenticated (for whatever reason). This means that once I'm connected with a nickname set by mIRC I can't even change off of it unless I part the channel or reconnect entirely, which is extremely annoying. I usually end up reconnecting (when my ghost disappears, for instance), as /part messes with my channel order.
It would be useful to either allow users to disable this via option or-- as a fair compromise-- via script somehow. I'm not sure if there's any way to do this via script currently, but if there is, I wouldn't mind going that route... any way it can be disabled would save me a lot of frustration.
I know you're trying to remove options rather than have to add more, but a simple single checkbox for "[x] Choose nickname when in use" or something would be good. Simplifying options is something I always fight for, but IMO it's relatively unprecedented for mIRC to have functionality this basic without allowing any form of customization.