Like any other game mechanic, there are times it makes sense to have it as an option, and times it doesn’t. If it’s a 100% PvE cooperative game you’re playing with a close friend you know well, sure; why not? Let either player pause the game for everyone. At least some of Hazelight Studios’ games feature this (A Way Out, It Takes Two, Split Fiction).

But for competitive fighting games or ones with many players, it could be abused, or just be too annoying to enable. Maybe in the latter type an in-game voting system where everyone has to agree to pause the action?