Re: pot instead of three way switch in HH guitars?
This wouldn't be a matter of "not working" so much as "what UX do you want".
If you really do live in the space between the 2 discrete pickup positions, then a blend pot might be good.
If, however, you switch between full-on neck and full-on bridge with any frequency, then it might be annoying to have to go through the full travel of a pot each time. You could mitigate that somewhat by using the Bourns low-friction pot, and then maybe adding a knob pointer so you know where you're at exactly.
I'd advise against the rotary switch with many settings. It's annoying to have to hit many detents (speed bumps, essentially) when moving between settings. I found this to be the case with the Gibson Varitone on the BB King Lucille.
Come to think of it, a true DJ mixer-style crossfader might be the way to go. I don't know if that's possible in a guitar, though.