How many games allow you to completely change your loadout and tactics in the middle of combat?
Most of them. Any game, even RPGs, that have inventories, equipable items and weapons, and attainable skills allow you full access over them while in combat. Locking away tools designed for combat while in combat for abitrary reasons because you haven't equiped them beforehand is bad design. It's not like you left them on your ship or at home base, or some signal is jamming your access to them, or your inventory hover bot flies away in the heat of battle; They're right there in your pockets. You should just be able to equip them whenever you want, but the game says you can't because...
You know the system that allows you to learn a weapon specific skill by wielding that weapon and using the skill enough times to unlock it, and then you can use that skill with every other weapon from then on? That's a good system. The materia isn't, because it remains static. You can't unlock the ability to switch it in combat, for example by upgrading it all the way, or unlocking a materia slot in your skill tree, or creating a set amount of different materia builds based on how many weapons you have acquired and then being able to switch weapons during combat. This would meet the requirement of earning this ability.
The game does reward skill, I don't see the difference. It doesn't just "spring" enemies on you, you can see enemies on the battlefield most of the time and those that do surprise you are of the same type that you've fought previously. The game's skill come from being able to utilize the materia you have equipped to the best you can, as well as the ability to combine and build your characters the way you deem fit.
Materia is also not the entirety of combat, it is HEAVILY skill based.
for example here is the hardest fight in the game on hardmode defeated with NO MATERIA even equipped on the characters.
So saying it is just a button masher and solely reliant on materia is easily proven false.
Then what's the point in the materia system even being there when it apparently isn't even that crucial to the combat? Why allow materia to be swapped from character to character and encourage making certain builds based on the enemies you'll be fighting? Why not just have locked skills for each character like in other
Final Fantasy games? Allowing character builds and swapping builds - a build focused on fire attacks, a build focused on healing - implies strategy, the skill of strategizing. Which then gets hampered by not having the knowledge of what your going to fight and locking you into your current build as soon as the fight starts.
And here's the thing, it's actually real easy to just reload before the fight and change your materia accordingly. But that's really annoying and takes you out of the flow of the game. It's not that it makes the game harder, it's that it makes the game more of a chore then it should. The materia system as is feels designed to have you scan your foes, quit out of the battle, set the appropriate materia, and then restart the fight. It's cumbersome, and all it would take to fix is to allow you to switch materia in combat.
You don't like the game or system fine. But saying it is a bad system is just ignorant because everything you've said as a reason is provably wrong.
I actually really like the game (apart from the meta nonsense), but the materia system, or to be precise, the hard locking of it during combat, sucks and is bad.