The Sterling RFR2 Non Linear Task Force is also wrestling with these points at the moment, and we are hopeful that they will publish some recommendations soon that the market can coalesce around.
The way the fallback protocol works is that once you adhere, you adhere for all legacy trades that reference an IBOR3 in a range of documents. If your counterparty also adheres, then the new fallback language is applied to all transactions between the two of you.
There is no opt-out for particular products or specific transactions. ISDA envisages that counterparties will subsequently enter into bilateral amendment agreements to exempt certain trades or products, or override their treatment with better alternative(s). See ISDA’s RFR Conventions and IBOR Fallbacks – Product Table for more information.