"Multiple Methods, to respect each kind of gamer" is what I'd choose. But chose "free battle" for the poll.
Android 21 in DBF is the worse, since you have to go through all 3 branches of story to get her. It definitely became a chore. Kagura in BlazblueEyeDon'tKnowWhichOne also was locked behind stuff that took longer than needed to earn him.
KOF XIV did it mostly right, in that Verse and Antonov were unlockable through story, but months later, along with required gameplay patches, they became unlock-from-the-start. So they worked as an incentive to play the story... and then updated later to make tourney play easier. I also agree that a "Tourney friendly mode that disables achievements and pop-ups, while unlocking everything" is also a great option.
But in the end, Unlocks should inspire play and engagement. Which means they should be available to anyone who puts time into the game, regardless of how. If I've fought the character online, offline, in story, and / or in bonus modes, just unlock them.
Same for colors and stages. Let me earn what I see / fight, and what I know is available. The fact that Mortal Kombat 11 puts so much crap behind RNG is ridiculous to me. You could go weeks knowing something is there, but not be able to use it. Or may possibly never get said thing after weeks or months of play. At that point, what was once an incentive to keep playing, is now a reason to move on to something else.
One thing I think fighters should do more of, is offer new lore / relationship building things with each patch, too. Like... why has SFV gone on for so long with the same victory poses, same taunts, same boring pre-round animations between characters that should know each other, etc? Seeing little interaction bells and whistles "unlock" as a game grows, would be fun and great. I'd LOVE to see characters that face each other all the time in IRL tournaments get special intros between each other, or watch the most played teams online have a special interaction snuck into an update. There's a lot that fighters could learn from the MOBA and F2P genres, when it comes to refreshing old content to make each season feel like a new game.