I dislike shower niches they are in my experience always yucky and the water never seems to drain away properly I would leave it out and get a nice shower caddy to hang over the door when you are finished

I think it would still look ok there.....it is centered with the light, and the showerhead and tub spout on the right will help balance the offcenterness. That said, I wouldn’t do a niche at all for the above reasons. I would do a shower caddy or a removable corner shelf unit.

This is standard procedure for remodel niche locations but if you want a different location you could re frame the back wall. In your situation you would also have to move the knob and tube wiring.