I think it would be nice. You might want it wrap at least along the side toilet wall as well, though. (Of course at that point, you might as well finish the wall under the window too....hmmmm...I think you can do as much or as little as you want.)

When selecting your wall tile, try to find one that has nice trim pieces--this isn't the sort of thing that will look okay with a strip of Schluter trim.

One wall of tile wainscoting would look odd and unfinished. Either do it on all of the walls, skip it entirely, or tile the whole wall as a feature.

I like the idea. In fact, I also dislike the 4” strip, and I did what you’re describing along the wall behind vanity and toilet. Is the vanity freestanding? You’ll want to coordinate the coursing of the tile with the height. I thought about wrapping it around, but preferred to keep it simpler. It doesn‘t feel unfinished at all. Good luck!

Ok same here. You might wrap it on the right side, since it’ll be near the sink. Mock-up is a great idea :-)