If you watched (or played) the network test, you'll understand why you need it. Basically right at the start you encounter groups of enemies, as in groups similar to the town area in Bloodborne with the dozen or so enemies in front of the pyre of burning bodies. And then picking up an item and right over the hill, there is another similar group, then another one... then one more, then another in front of ruins that go right down to a boss with no save point.
Having to do one of those groups, perhaps go rest, respawn everything, then run to avoid that group but try the next one, it'd just be a hassle. With the system they made, you can keep exploring far longer. I've watched both Oroboro and Peeve play the 72 hour preview (network test with a 72 hour timer before the public network test), and not one of them complained about it, but rather sought out mobs at times hoping to get flask refills instead of resetting at a bonfire/shrine.
Looks to be a very good QOL addition. When facing bosses and the likes, it had no impact at all. Unlike the lifegems and flowers you could farm in DS 2 or Demons Souls to get way more healing even on bosses. It only has an impact on exploration which is a much bigger aspect in Elden Ring than in any souls game before it.
Where it possibly could be "exploited" in a way is if you can run from open world bosses without them having a regen of health. Then I guess you could fight until flasks were out, run away to a group encounter you know you can clear easily, refill a flask or two, then go back to boss. Never saw anyone ever do that, with the dragon for instance, but it might be a thing you can do? Not sure if bosses reset if you run from them. Or if they even have tethering? Be kind of amazing if they never lost aggro like EQ. Train to bonfire!
