I'm talking about setting up mid/side mics, and then running through a mid/side to XY converter where you record XY (or Left/Right) to the recorder. It's seems like a good idea, and a cool feature to have in a pre, and maybe there really are a few people who are good at it, but I think it's EXTREMELY hard to get right, and I don't think I can ever get there. I accept the fact I'll never be supermodel or play guitar like Warren Haynes either. Who agrees with me? (not just about the supermodel part) Who thinks they have it nailed? I think the majority of us shouldn't even try... if you want to do mid/side, record raw mid/side and mix it at home.
I can see on-the-fly decoding would be necessary for video recording folks if they have a mid/side shotgun and want to record L/R audio without post processing the audio. How well they dial in the "width" is much less important to them... most people who watch the a TV show pay almost no attention to the audio quality. Tapers are very fussy about dialing in the width.
I've done dozens of raw mid/side recordings which I decoded at home (LSD2, 414's, various ADKs). I think it's a right of passage that every taper worth his salt should go through, because you'll force yourself into an education in the process. You will beat your head against the wall on the first couple, but then you'll figure out a workflow and it's easy. If you give up, you dropped out of school on that forced education part.
One day I bought a Mini-MP which had the decoding feature, so I tried it. The first time trying to use that feature I messed it all up, somehow got something backwards, and I couldn't repair it in post. I used it a couple more times with the right connections, but I didn't dial in the width correctly. In that case I did an XY -> Mid/side conversion, then picked it up like it was a raw recording so I could dial in the width. I thought "maybe I just need to do this enough times until I get the hang of it", but I don't think it's that easy, and here's why...
How many of us can walk into a room, set up and guess where to set the gain knobs perfectly before the music starts, and then not have to touch them after that? I'm talking regular L/R stuff. I can do it maybe 50% of the time, the other 50% of the time there is tweaking, which of course I have to level out at home. To get a good "mid side on the fly" recording I think you need to have that skill nailed perfectly, and THEN nail the skill of guessing the width on top of that. Because if you adjust 1 knob, you better adjust the other one exactly the right amount too, or you just shifted the width of the recording. Most of us know how to "fix" a recording that has a gain change, or one channel is a little hotter than the other. To repair a width shift you have to encode XY > M/S, then find the spot where the width went bad, and adjust the side channel by 1.2db (or whatever it is) then decode back to XY. I can see that taking a few iterations.
If anyone read my recent post under AT4050ST thread, you might think I'm contradicting myself, but I don't think I am. That's a mid/side mic with an XY decoder in the mic. I can set that to "simulated 127 degrees" and record Left/Right to the recorder. If I don't get the left/right gain just right I can tweak that until the left/right are even just like anyone else does with XY mics. THEN I can encode it back to M/S and play with the width. To me this is a big difference... with a preamp it's dialing in "how much of the mid mic to do you want, and how much of the side mic do you want?" and the meters are not helpful. On the AT4050ST mic, the width is fixed, I just try to bring both gains up evenly but I have meters to guide me.
I think the only way to do it is:
a) start with preamp with mid/side decoding,
b) obviously get your mid/side left/right front/back stuff straight
c) set the preamp conservatively, and don't touch those gain knobs, so the width at least stays fixed. At that point you have the stereo mic with fixed width.
d) then you make gain adjustments with the recorder, not the preamp.
e) it would be extra handy to have a recorder with a Gain/balance mode instead of just Left/Right. I think the SD-7xx family has that. Any others?
Probably someone should tell me "Dude, you are waaaaaay over thinking this. Take a chill pill and relax".

But that's the goal of this hobby, isn't it? To perfect the art of getting good recordings.