Witcher 3's approach to potions is, however, way better than Witcher 2's which had short ass potion duration AND required to constantly gather shit to make them.
TW2's system is basically just a dumbed-down version of TW1's alchemy, which made it so disappointing. TW3 takes a whole new approach, which works slightly better in practice (alchemy is actually necessary, for example) but which unfortunately doesn't have any connection to how you would actually
expect things to work in the game world. Mechanically TW3 is unfortunately just a bunch of nonsense.
They didn't want people burning themselves out on item gathering busywork (though there's already plenty of that)
Yeah. In an open world game hoarding alchemy ingredients would've been much likely to become an issue than in TW1 and TW2, which had smaller areas with a finite amount of things to pick up. They also balanced it up by making the potions require very specific ingredients, whereas in the first two games each potion could be brewed in multiple ways.
alchemy/crafting materials have no weight
How exactly does this prevent people from burning themselves out on item-gathering busywork?
One of the smarter things they did.
No. It's only smart in the context of preventing hoarding, which in itself is a side effect of the terrible inventory system that allows you to carry around enough stuff to equip the whole Nilfgaardian army and encourages you to pick up everything that isn't nailed to the floor. In practice the refilling system only works for the first few hours when you've only got access to a couple of potions and might actually run out of alcohol. But later on? You'll probably be carrying hundreds of bottles of Dwarven Spirit, which you can use at any time to replenish your entire massive arsenal of potions right away. Like almost everything else about the game's systems, all semblance of balance is thrown out of the window after reaching a certain point in the game.
I definitely would've preferred something closer to TW1's system, which was almost perfect as it was, combined with a TW1-like inventory system. The idea of refilling potions isn't inherently bad, as it's a functional way to lower the tedium of ingredient-gathering, but I would've put some limits on it, like your potions becoming more and more diluted and eventually requiring fresh ingredients to restore their original effectiveness, being able to refill only a low number of potions at once, and "refilling" bombs requiring some sort of gunpowder instead of alcohol.