Hi!
Trying to be optimistic, I voted "Yes" this time. But as I have explained before, it is very important for me that we find a way to curb the resulting onslaught of immaturity that might occur (I am not sad if I am wrong and it does not occur at all, of course).
Personally, I would favor a semi-liquid system as it allows for a realistic simulation of your water-driven sewer system, forcing you to thing about flow directions and the like in your design (with evolving physics, this may range from a simple setup that needs to get flushed with water from a fresh water reservoire regularly to something that efficiently uses the flow dynamics to have the waste move away most of the time by itself.
One aspect I also consider very important/interesting is waste working as a very strong contaminant, biologically poisoning food, drink, and water it comes into contact with. Considering that such contamination would, as far as I know, in real life most probably cause diarrhea, which is indeed something that can cause death via dehydration (and still does today in many parts of the world!). Just think about all the efforts to get clean drinking water for the poor parts of the real world.
A minor glitch may cause a little setback in your industries and send a few dwarves to the hospital, but any continuous misuse or major catastrophe should pose a serious threat to the continued existence of your fortress.
On the other hand, outdoor waste should degrade into rich soil without greater problems, so allowing dwarves to default to simply defecate outdoors if no better solution is available. However, as contaminants spread (currently actually a bit too much), while this is no problem with a fortress of 20 or 30 dwarves, 100 dwarves should probably create so much refuse that any stray or wild animal may begin to spread it into the fortress proper.
In addition, even if not causing any direct harm, the confrontation with waste should cause a negative thought for any dwarf, except maybe for rare dwarves with a scatological inclination ("scat" is a term some people in the real world see in a positive and sexual way, so I think it would be an option to add to the diversification of the dwarves).
Besides the outdoor, dwarves would prefer using a special toilet, which is a frame created either at the masonry or carpentry, just as a well is preferred over a murky pool. This works as a floor tile for walking, but when used, the waste is transported to the tile below it, so it needs to be built atop an empty space, just like a well.
An interesting question would be how to handle cat toilets. Maybe using a zone designation over sand/soil could be an approach.
Deathworks