Sure.
I don’t see this goal as exclusive with XP. If you reward the player for behaviors that make sense for the character, you reinforce rather than undermine this goal. Rather than treating the game and the metagame as intrinsically conflicting, I favor game design that aims to put them in concert with one another.
Why not both?
This can be achieved by awarding experience for overcoming the challenge, regardless of the means by which it is overcome.
Sure. I prefer games that focus on characters who “would do” the more exciting thing.
I understand your position in principle, I just don’t see how it’s a counter to my argument that by not tying character advancement to specific in-game activity, you remove the agency from character advancement. As a player, I want to feel like my choices have an impact on my character advancement. I want there to be clear ways to pursue that advancement, rather than being forced to simply accept it when it comes.
Of course.