The challenges for improving the WordPress comment system are many and hard to tackle. I totally agree that the settings panel for comments is outdated and hard to grasp. I'm also on board with the fact that most new WordPress users have a hard time understanding what each setting does—I still struggle, although I don't consider myself a beginner.

Besides that, there's still work to be done in improving the commenting experience. I think that not having a modern editor to bring some life into the thoughts we share (linking to a resource, basic text formatting, etc.) is a big missed opportunity. Not to mention that it's hard to keep a conversation going without the ability to link to certain comments or mention people. If people don't activate post notifications, everyone looking to engage with them (or challenge them) will just be left hanging. I also talked about these challenges in extenso - https://pixelgrade.com/upstairs/conversation-system/

We tackled this challenge of improving the comment system and turning it into an actual conversation system, with a conversation starter to get the ball rolling, a place for people to share their background for more transparency, comment highlight. However, there's more work to be done, and some things might be hard to accomplish without WordPress making the first move.