This is an interesting thread, and after coming back to it now several moths later, find that I didn't give it a careful enough reading. Or, maybe it's that I've learned a little more in the meantime.
There are many interesting points, so many in fact, that there is a lot that could be mined here imho. But I'll focus on the one that jumped out at me on this reading:The first time I read this, hadn't actually started teaching this way. Suppose that in solo practice I did this, but not in teaching. Now, have been teaching this way for awhile, and it's quite effective. Pieces of kata actually 'become' techniques, or as Thunder Foot says, combinations. And just like combinations aren't set in stone (they're useful for practice, but the jab, jab, feint, hook which my old boxing coach swore by, he would also expect to be changed up in the heat of battle), so kata 'techniques', or natural groupings of movements which seem to go together to make up a combat 'combination', can and should be changed around depending on the circumstances in the heat of battle.
To paraphrase Iain Abernethy, we should no more be stuck with using kata movements in the order they appear, than we should be stuck using words in the order they appear in the dictionary. Breaking them into these 'combinations' allows us to realistically practice them solo, as well as train them against resistance (live).