Lyxen
Great Old One
Right. So you're straight up inventing the period of time when the caster is nowhere.
We're not inventing anything, it's there in the rules already. Again, nowhere in the rules does it say that the travel lasts less than an instant.
How long is this time?
An instant.
Can readied actions take place during it?
Of course they can, as I've demonstrated. The original game, and even more the Xanathar rules, clearly tell you that although some things can take place in an instant, in the same instant, does not mean that they are RESOLVED simultaneously, they are just resolved sequentially.
In the same sense than having characters to take damage if they stand in fireball is to punish power gamers that would exploit that as a tactic. A game having rules that sometimes limit your options is not punishing anyone, it is what makes game possible that makes different tactical options interesting.
And what we are presenting is not abusing any rule, it's perfectly in line with the rules exactly as written, and it's not overpowered or game breaking in any way.
Yes, there might be situations where Thunderstep is not a viable choice. This is good. Different spells exist to be used in different situations.
That is another matter entirely, one of taste, and of course you are free to rule this way. But ruling differently does not contradict any rule or game principle either.