The whole point of the new block is to fix the lag issue while maintaining the game's current balance and risk VS reward aspect that docked reactors provided. Not a single suggestion I have seen so far manages to achieve that.
I'd like to argue that the new blocks offers little reward (inferior power) for high risk (slow explodey systems). Granted, this system is far superior to docked reactors as it reduces complexity and lag by decreasing entities needed to produce the same power. However, I see some glaring flaws that are fairly easy to correct:
1. Complexity of use.
All the ships I've ever seen use docked reactors used them for the singular purpose of producing CONSTANT power. While the idea of a "backup battery" is intriguing, I've never seen anybody use it in their ship designs. Suffice to say, its not a desired feature. What will likely happen is that Auxiliary Batteries will be on 100% of the time, and it will be only by accident that anyone ever switches them off.
*Proposed Solution: Split off the "backup battery" functionality into a separate block, the Auxiliary Capacitor. Then add an "Auxiliary Reactor" block that works like Aux Batteries do now, only without the capacity function. Simple, effective, and idiot-proof. This also solves the problem with AI using auxiliaries, as it always puts out power.
2. Wonky "slow explosion" mechanic.
Imagine if you were an engineer who made ship reactors. People use your designs, and rely on them working well. Then some idiot shoots your ship. Things start exploding. They keep exploding. Then you remember, you never put a way to shutdown the reactor and stop the chain reaction. People stop using your reactor, space lawyers sue you for trillions, and you starve to death on a backwater planet.
The current mechanic makes no sense. If a aux group gets hit, it repeatedly explodes, whether you turn off power or not. Any power system I've ever seen, sci-fi or otherwise, has some way to shut things down and stop the reaction so things can be fixed.
*Proposed solution 1: Aux explosions can be stopped by turning off auxillaries. There would either be a delay in re-activating them, or the affected group would be "disabled" until after a system reboot.
*Proposed solution 2: Aux reactors start a countdown when hit starting a "meltdown"(so not as to be confused with overheat), that on reaching the end of the countdown, that reactor group would explode with dramatic effect. The method to stop the meltdown should involve the player getting out of the core and interacting with something, whether it be using a repair beam on the core, or an engineer's console, or an aux block in the group. Perhaps logic could be used to trigger an emergency shutdown. This may be overly complicated to figure out which group is the one melting down, so perhaps a meltdown is only triggered if a set percentage of aux blocks was destroyed and the meltdown would affect the aux system as a whole. I personally think mechanics that encourage multiple players on a capital ship is desirable; could be used for new crew systems as well.
3. It is trivial to puncture armor and hit auxiliaries
Ever since cannons have been given innate punchthrough effect, it is trivial for a weapon to puncture even multiple layers of armor and hit system blocks, and now that things explode when hit, this makes cannons imbalanced. In exchange for buffing armor, I'm willing to have auxiliaries explode with dramatic effect when hit. Even with the new armor HP system introduced earlier, they now provide insufficient protection to ship systems
*Proposed solution: Buff armor! Either have armor innately block cannon punchthrough for armor blocks(similar to how beams block the piercing effect), or increase the absorption rate that damage is transferred to the Armor HP pool to 74.9% (can be buffed to 99.9% with passive effects). I've done some testing with turning rates up this high and was pleased with the results: it was very hard to damage armor until the Armor HP pool was depleted, but a focused heavy bombardment of a single area could break armor.