Thanks for the clarifications Kurtis. I played with the system today and it definitely has potential. Hopefully the device workflow is not deprecated with the new approach because it fits perfectly with making prefabs that newcomers will be able to understand well (in addition to verse). Also would love live edit support, for example a hotkey that allows me to select parts of an entity, then when turned off I select the entity itself. Also when you hover with the phone on a prefab, the outline for each entity has different colors to show the parent and the children.
My perfect workflow is to use live edit instead of the prefab editor to make the overrides, because I can form the new version based on its surroundings