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Really well put on the risks and how outcome based projects aren't necessarily better aligned for good outcomes.

The best company I worked with did a multi-drop "agile" contract where there were several incremental prototypes and product releases with feedback and tuning the requirements to ensure we got what we needed in the end. That felt far more aligned and how I'd prefer to work but it took a lot of trust and a long relationship with the vendor.

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I feel that it's almost always necessary to have more than one delivery at different stages otherwise some important feature or bug fix doesn't make it in.

You could say each increment is a fixed partial fee or milestone but that doesn't work unless there is adequate requirements analysis at the start, and they are small increments that can be determined dynamically and/or in a highly prioritized way.

And also each increment has to be the equivalent of billing for that block of time anyway.

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