About Allow reading & writing .txt files as well as .md I don’t have a clear opinion.
On the one hand, extensions make it possible to know at a glance which light markup language (.md, .adoc, etc.) our files are composed of, to have the feeling of keeping things clean , and possibly contribute to pratical advantages (sorting, assigning a default application to open a type of file, etc.),
and on the other hand, the variety of extensions results in a decrease in interoperability.
I would happily opt so that light markup language applications could read and interpret .txt files, as a common foundation. At least as a check option.
I mainly consider the “inconvenience” of having to change the extension if you want to work with multiple applications. This is an additional and boring task.
The clarity of working with Obsidian made me convert all my .txt files to .md. Otherwise, I wouldn’t have done it. I have little fear of the loss of interoperability, because there are a lot of Markdown applications, - with the exception of Wiki-Links which are not originally integrated into Markdown (but still seem to be taken more and more into account ).