This seems like a neat idea, although I worry that if it’s not executed right it seems like I’m just making up weird stuff to make the game harder. As it stands, I stick to the RAW pretty closely so that I feel like I’m being reasonably fair. I tend to doubt myself a lot when I homebrew mechanics that work against the player.
I think I mentioned the word in the post but didn’t elaborate: dilemmas. It seems like this is a big part of what you’re suggesting: letting the players take part in deciding what negative consequences they suffer where there is no answer that is strictly positive for the players. I do feel like I have failed to present my dilemmas in a way that gets perceived as fair, it just seems like the players assumed that there must be time to loot the vault and escape from the demon without consequence, when I was trying to make it clear that they can either get away quickly, or loot the vault and have a powerful enemy catch up to them.
And to be honest that’s kind of been the most fun I’ve had is when I offer a choice between safety without maximum reward, or taking a risk that requires a clever solution to escape from. I feel like I telegraph the danger but I can’t overcome this underlying assumption that I’m not actually going to follow through on the threat.