The default-allow setup + AV can be very effective, just protect the attack vectors covered by SysHardener. You can drop some of them if you are a cautious user.
The setup which is close to your idea can be also made (for some users) without GPO:
- Browser, chat clients, Skype , messengers - in AppContainer.
- Ads & malware filtering via DNS or web browser extension.
- WD + WD Network Protection.
- PDF viewer in AppContainer with blocked active content.
- Office Online.
- VLC from Microsoft Store (watching films).
- etc. - generally use applications in AppContainer from Microsoft Store (Universal Apps).
- Gmail (Google) - do not open spam attachments; open other attachments via the above applications.
- Do not open the files, which cannot be opened by the above applications.
The built-in AppContainer restrictions for Universal Apps are often stronger than GPO policies for desktop applications. Furthermore, the AppContainer environment can hardly be exploited (so far).
The con of the above setup is that applications from Microsoft Store are rather simplistic. You can also like to install some games and probably some applications for productivity (not available as Universal Applications in Microsoft Store).
You are wrong when thinking that MS Office or Adobe applications can be tightly controlled by Windows built-in policies. Those policies can prevent only the known & popular attack techniques, and M$ template can do even less (far away from locking down MS Office).
If you are cautious enough and can avoid the risky activities, then you do not need anything else except the standard Windows 10 protection with SUA, on the well updated system and well updated software. The chances to be infected are probably as little, as chances to be robbed of the computer.
If you are applying Windows Policies, then you probably think that something on your system can be exploited, or you are afraid of running something malicious (script, file with dangerous extension, installer, etc.). You can apply default-allow setup for installers and restrict scripts, block files with dangerous extensions, block some popular sponsors, etc. The chances of infection will drop significantly.
You can use the recommended H_C default-deny setup (also based on SRP and some Windows Policies) with forced SmartScreen, and then the chances of infection in the home environment will be very little. Doing this via GPO is possible (requires deep knowledge of SRP and much work), but will be uncomfortable in daily work.
You can use H_C default-deny (max settings) + no elevation on SUA profile, and then the chances of the infection will be close to 0.
Simply, the user have to decide what level of security will be enough. For most users, the default-allow setup similar to SysHardener settings + AV will be OK.