> Right now, most devices on the market do not support the C extension, and any code that tries to be compatible does not use it.

I don't know of ANY commercially-sold RISC-V chips that don't implement the C extension. Even the 10 cent CH32V003 implements C (RV32EC).

> burns 75% of the entire encoding space

In ARMv7 the 2-byte original Thumb instructions burn 87.5% of the 4-byte encoding space (28 out of 32 combinations of the 5 MSBs).