@raulcraven I am heavily invested in NPS Tier 1 and also have started investments in NPS T2 in the last one year. I agree with all the positives the OP mentions for NPS T2.
Apart from the lack of general public awareness about NPS T2; the main concern people have with NPS T2 is regarding it's taxability. The rules of LTCG applicability for NPS T2 is ambiguous. It is high time PFRDA works with IT dept and get clarity on tax aspects of NPS T2. Go through this informative article from Prime Investor on NPS T2 -
https://primeinvestor.in/nps-tier-ii-account-how-to-use-it/
Somebody mentioned they could keep the funds in NPS Tier-2 for a long duration (say 30 years) and the taxation issue could be sorted out by then. But actually this defeats the very purpose of investing into NPS Tier 2 -
which is liquidity. If liquidity is not a concern one can directly invest the funds into NPS Tier-1 account itself; which provides good tax benefits both for contribution (50k for 80ccd(1) and 7.5L for 80ccd(2) ) and withdrawals. The 60% lumpsome withdrawals from NPS Tier-1 are completely tax free for any kind of capital appreciation. Even the 40% annuity withdrawals could go away soon and be replaced with Mutual Fund SWP style withdrawals.
However please note; NPS T2 has one undisclosed benefit. It can be used as a
routing scheme to the NPS T1 account. Your regular investments like SIP can be done to NPS T2 and enjoy the psychological benefits of liquidity offered by T2 account. And from NPS T2 the funds can be moved to your linked NPS T1 account at a later stage. Once they move to NPS T1 account; they enjoy the full tax benefits of NPS T1. However note; the reverse is not possible - i.e one cannot move funds back from NPS T1 to NPS T2. Since NPS T1 is essentially locked in till age 60 years; the funds are pretty much illiquid. So try to time this move from T2 to T1 closer to your retirement age or when you are pretty sure you will not need those funds till your age 60.
Please refer to my earlier posts on the NPS it's benefits and taxability -