That’s somewhat confiscatory, particularly if the timelock setting is enforced by OP_CLTV.
Unfortunately, that’s true. But practically speaking, we can mitigate the risk of confiscation by signaling activation several decades in advance. I doubt there are many coins with a single spending path timelocked past 2050, for instance. As long as the risk of confiscation is no higher than it already is for BIP54 (i.e. the 2500 CHECKSIG limit), I see no reason why the possibility of confiscation would necessarily be an issue.
Generally speaking, we should always avoid a hard fork, if we can. We don’t need to decide now, but if we can modify BIP54 at little cost so that a soft fork remains in the cards, shouldn’t we?