I'm pretty sure Nick said he was inspired by Phantasy Star (and looking at both games you really can see it). One thing I love on PS is the way that timing attacks actually makes a difference. On SK smashing the Z button works way more effectively than it should do (and there's no real downside to it, as-long as you remember when to shield).
So this is my proposal; hitting attack halfway through firing a shot or swinging your sword should cancel the attack to try to start a new one (therefore button mashing would leave you standing around like a moron). In order to actually pull off a combo the player should have to time their attacks and, if they time it perfectly, there should be a damage bonus or a "Combo!" bonus.
As time progresses (as I accept this will take time) this could develop so that chaining strikes repetitively perfectly would allow for longer combos (see SAO: Mother's Rosario). Swords like Strikers should be easiest to chain, while swords like GF would be harder to chain. Eventually shields could be used as part of this chain (I swing striker twice, spin, striker, shield up, continue) and even bash and dash.
This would give more player's freedom and allow players to demonstrate their timing skill rather than weapons and dodging being the only really important things in the game.
It'd be really cool if I knew whether Nick originally planned to introduce this into the game (atleast the first part).
It seems your proposal actually would also complement defense as well given timing is correct (w/ combo cancelling), if the player decides otherwise.It also seems as if it would have a little more effect toward swordplay.I assume you know it would have significantly less effect on charge spammers unless shielding(like you said) is implemented officially as part of the chain.
As for support,I really don't know.It feels like it would be better if extensively implemented to the point where there's a 'bonus' section offering more power(damage status,flinch,etc.) but would,like assume you want,be hard to pull off,but at the same time,should be there as something not so game changing and as a decent bonus to knights rather than a whole game changer (including the penalty part.)