For reference, here is the patch I’ve made to libcore to eliminate panicking. I obtain a ~6K reduction in code size in my current kernel by compiling the standard libraries with feature=trivial_panic, mostly because more fmt-related functions can be garbage-collected by the linker. (In both cases, the libraries are compiled -O3. Failure to use -O3 resulted in the 45K image I mentioned earlier)
My understanding of the proposal is that -Z abort-on-panic would do something like this patch (or maybe just replace call panic with abort()), except as a compiler flag, not a configuration variable in libcore