Hello!
Some updates on this proposal (and on navigation in general): the target level has been removed from the breadcrumb as proposed. In addition, after experimenting Option 1 proposed for the navigation, some drawbacks were discovered and now Option 3 is implemented, but using the {{documentTree}} macro. See the reasoning: XWiki.org Documentation Reorganization (batch 3) - #65 by vmassol. I consider this proposal solved and it’s been implemented. See the results on xwiki.org in the "/Doc" space.
Thanks!