Now with cleave my hero can hit him for 20 points of damage cause it will become all physical damage when using an ability.
True, nice little workaround. Only works for one attack, then you have to deal with his fire resistance again. If you're playing on expert or higher, an extra 8 points of damage hardly ends the battle. The scenario where you swap to a cold axe might still kill fire resistant/cold weak creatures faster.
What's that? You'll use eviscerate or true strike? Eviscerate does not bypass resistances, just gives a critical hit. True Strike does, but it does 75% damage, so have you even gotten ahead with damage dealt in that scenario? Only with rare weapons that do more than 25% of total damage in non-physical attack.
Not sure how you go from "This is a small exploit" to "Resistances are meaningless in this game," because even with this example resistances still matter in many cases in this game, and there are many strategic consequences to consider, play with, and win/lose by.
When do resistances matter?
-All the time with magic
-Anytime an ability converts attack to another unitstat, like channel lightning, flame tongue, etc.
-When you have run out of abilities that can exploit, you have to accept that your burning axe is subject to resistances (This is often)
-When using swords, bows, crossbows, staffs, there are no special abilities to allow this exploit
-Other. Physical damage resistance, spell resistance, etc, which come into play quite often
You say "A lot of skills and abilities need to be fixed revolving around this." If we take all the spells/abilities that use [UnitStat_CombinedAttack] in a way that might turn elemental damage into physical, what do we have?
(Many are hero only, meaning troops can't multiply the small advantage by troop count)
-Arching Shield Bash (Hero Only)
-Cleave
-Crushing Blow
-Deadly Bite (unlikely to be used by player)
-Decimate (Hero only, most useful against troops)
-Focus (Hero Only)
-Guarded Strike (Does 50% damage)
-Impale
-Shield Bash
-Sweep (Hero Only)
-True Strike (Hero Only, 75% damage)
The main 'offenders' are cleave, crushing blow, impale, and shield bash. So yes, you can spam these abilities to wrack some up small damage bonuses against fire elementals and air elementals.
But against a unit with significant defense, the benefit of swapping elemental attack for Unitstat_Attack_Pierce may not be so rewarding.
...resistances and immunities really don't mean that much and should have just been left out unless this is fixed...
This is an exploit to get around resistances a little bit at a time. Works great on some elementals, not necessarily so much on enemy troops. Resistance stats remain relevant in many other situations.
Still waiting for you to explain how it became a "design flaw."