I'm not in favor of reducing the conversion time, as I don't think it particularly offers much benefit in exchange for the increased risk of price manipulation. I don't really agree that people who don't want to risk 3.5 days for a 5% return would suddenly want to risk 1 day for a 5% return. Sure it could move a few on the margin, but mostly not. Either of these returns is more than ample.
The main obstacle IMO is not the 3.5 days or the 1 day or even the 7 days it was before (IMO 3.5 days has worked about the same as 7 days; why?). It is just the small size of the market and limited overall market maturity (e.g. few if any derivatives) so there is limited capital people are willing to invest to get involved. Are any of the big crypto trading and market making firms involved? No. But the reason they are not is the size of the market, and not the conversion time.
I don't think anything really bad would happen with 1 day, but I think it is a pointless distraction to look there.
More use cases, bigger market, better stability yes ... the thing is HBD is still struguling to prove itself to Hivers as well, who are willing to use it and suport it even at bigger risk then some other options. The native community is still a decent market, and I bet if there is more confidence in hbd, we would see 20M to 50M in HBD in savings, unlike 1 to 2M now ....
Have you seen terra.... the concept is very similar to hive-hbd, just there luna-ust .... instant conversions, with some aditinal infrastructure etc...