I don't see how you can think that chording is exponentially problematic? As a pianist, I may play big chords of 8–10 simultaneous notes with glee and exhilaration. They aren't substantially harder than smaller chords!
I think that the awkwardness of chording is more about having to twist your hand/wrist, than about chording itself. As you well know, I've used Caps as an Extend modifier for years, hitting such combos as Caps+S+T+N (=Ctrl+Shift+Left) to select the previous word and I think it's ingenious and effortless.
Also this fails to solve the whole "non-modifiable function key" problem of at least Windows and Chrome OS.
Ummm, what exactly do you mean? That MSKLC doesn't implement it unless you edit the files, and PKL struggles with some modifiers etc? Or what? I know of no special problems with the function keys (F1-F24) as such?
On a side note, I'm now testing the AltGr-Caps/Extend swap by a registry remapping since PKL alone struggles with it. It's interesting but of course my Extend memory is pretty ingrained so I struggle a bit. It's nice to have the Extend-arrows on a one-hand chord but modifier usage is different which takes some getting used to (real modifiers may be as good as the Extend ones for this mode, at least some of the time, given that the left hand is more free!) I'll hopefully give it a little longer before I come to any conclusions. :-)