From my point of view, if the mod only seems to improve the game's performance and not alter the in-game physics in anyway, than I don't see why game mods like this one (any maybe the windowed mod) can't be used.

Also, im interested what kind of controller that everyone uses (i'm using an Xbox One Controller/windows 10) because i don't seem to experience the controller turn off very little to none at all

yeah, im in fully agreement with option 3

Hmmm? didn't force have a category letting you do with or without super sonic in the modern stages. i've assuming that you guys have already tried a similar method with generations with the skills or no skills?

I also agree with option 1 the best for generations as well.

Edit:

i would try making modern and classic leader boards seperate and just incorporate the bosses/challenges/stages that way. if it would make things less of a headache

you would put it as the Xbox One version because you are playing a port of the game rather than the original 360 version of the game it was on!

besides that, there could be many differences between the two versions of the game that haven't been found yet!