Should the remember last saved feature replace ODK Counter?

I would not. Although it's possible to do something like it with this feature, it would require somewhat more advanced form design and it's not guaranteed that instances will get unique values. That is, the first proposal at XLSForm spec proposal: add syntax to make it easy to use a value from the last saved instance with a binary toggle doesn't enable counter-like functionality. The user would have to be able to write an expression that adds one to a value from the last saved instance. But since it's the last saved instance we're talking about, if the user opens and re-saves an old record, the counter would essentially be reset.

I agree - ie not. Whatever counter mechanism is used should auto-increment as soon as a new num is requested, which for the purpose of generating a submission Id will be when a new form submission is instantiated. Whereas incrementing it based on a save operation (vs instantiate) effectively forces you to instantiate-finish-save any form submission before starting a new form.

Although this workflow - ie save an existing form before starting a new one - may common in practice, i don’t think it should suddenly become a strict ODK requirement [eg I certainly don’t require it] just for this rather isolated feature.