The only way Sated devourer won't create the same balance issues as Hybrid itemization:
Is if it is unilaterally supported as a full blown system. Let me explain what I mean by "create the same balance issues as Hybrid itemization"
The problem that plagued Hybrid itemization and Hybrid champions was that they directly competed with AP centric and AD centric itemization for those Hybrid champions. A Hybrid champion could either build strictly hybrid items, or could mix and match the best AP and AD focused items, or even just dedicate most or all of their build to pure AD or AP based items.
AD and AP items have multipliers that make building more and more of it more and more rewarding, examples are deathcap and infinity edge. A build full of hybrid items would have to provide similar multipliers to cause the hybrid champions to scale or else they would just pick the "pure" AD and AP items that provide those multipliers, and be stronger for doing so.
If Hybrid items did not provide multipliers that exceeded the power of the multipliers of a pure AD build or a pure AP build then there would be no reason to buy the Hybrid items. If they did, then they were objectively better, though limited to the champions that could wield them, causing those champions to be nerfed in order to bring them in line with the other champions in the roster and causing them to become garbage until they purchased the "must buy" hybrid items that they require in order to be competitive.
If Hybrid items provided roughly the same multipliers as pure AD and AP based builds, then the hybrid champion would just cherry pick the best items from the entire catalog of items, and effectively squeeze out more power from items than anyone else can-- which creates the same problem as before-- these champions get nerfed and are gimped into requiring this "optimal build" in order to be functional.
It is difficult enough to keep the item choice diverse enough for AP and AD based builds so that champions can have a few actually meaningful choices in game with regards to itemization-- complicating the issues of balance with the contingency "ok but what will these changes, which specifically target AP and not AD, do to hybrid champions?" increases the difficulty of maintaining the item system and doesn't add any real value to the game.
That doesn't mean Hybrid items can't exist, it just means that supporting hybrid items and hybrid champions would require treating both as a full blown system with just as much support as there exists for AP and AD-- effectively creating a "third stat", which is just "covered up" to not look or feel like an actual third stat, through clever use of number manipulation. But make no mistake-- in the end in order to have the same support as AD and AP, it would need its own full line of items and its own multipliers, and its own support as a full blown system, because the only way the live balance team can keep the changes to the AD or AP system from interacting adversely with the Hybrid system is to actually make the Hybrid itemization its own full blown system.
This brings me to sated devourer and on hit effects in general.
- On hit effects target a small pool of champions that use them most expediently, just the same as Hybrid itemization.
- Damaging on hit effects directly compete with the Attack damage and Crit chance statistic, which intrinsically increases damage on attack.
- Damaging on hit effects that happen to scale with AP also compete with Ability power.
- Non damaging utility based on hit effects must compete directly with cooldown reduction on champions that have utility in their kits already.
Because in each of these categories the different items in that category compete for the same role, only one can be objectively better than the others and champions must be balanced according to that. If sated devourer + stacking on hits is allowed to scale more strongly on any champion than the alternative attack damage + crit chance based build for maximizing damage on auto attacks then the same problems that plague the hybrid itemization will result.
Namely, that champion would have to be nerfed in order to keep them in line with the power level of everyone else and so that champion would be required to build Sated devourer (and thus jungle) in order to be effective. Just as with hybrid itemization, if mixing and matching on hits with sated devourer and a few focused AD or AP items ends up being objectively better, then the champions would have power in their kits reduced because they are able to cherry pick, and effectively squeeze out more power from auto attack oriented items than anyone else can.
Effectively, there are two systems for doing more damage with auto attacks. One system is based around on hits, and the other is based around crit chance, attack damage, and armor penetration. Any time a change is made to items of one system, RIOT must consantly ask themselves "how does this influence champions that are able to mix and match from both systems?", reducing their ability to forecast the results of changes and balance the game.
That doesn't mean on hit effects and Sated devourer type items can't exist, but in order to decouple them from the other auto attack oriented system (crit chance + attack damage + armor pen), they would have to exist as separate system. That means it would be its own thing, with just as much support as the AD system or AP system. This way RIOT's live balance team could make changes to one system without worrying how it would influence champions oriented primarily in another, because nobody is "mixing and matching" from two systems at once.
Hybrid itemization, which was intrinsically no different to a champion than a pure AD or pure AP system, just involved more complexity for no game value. The only effective difference was the side effects of the existence of Hybrid items and Hybrid champions, namely that Hybrid champions become extremely item dependent and have to be retuned every time a significant change is made to the AP or AD systems. The item dependency can be mimicked, and the maintenance cost was either invisible or frustrating to the player.
On hit itemization however, is intrinsically different than the AD + Crit chance + Armor pen system. Ad increases the damage dealt by a large number of different abilities, but on hit effects do not (with very few exceptions). Crit chance has the potential to also increase the damage dealt by a large number of different abilities, but that design path is not being explored. Armor pen increases the damage dealt by abilities as well.
In other words, on hit damage does not have to compete directly with the AD + Crit chance + Armor pen system because the AD + Crit + Pen system is not as specific as the on hit system-- it provides strengths that the on hit system does not, therefore the on hit system can be stronger for auto attacks as it lacks the power increase that AD + Crit + Armor pen provide to abilities.
That would make choosing between specializing deeply into Pen + Crit + AD + Attack speed or specializing deeply into On hit + Attack speed be a matter of choosing between having good damage on auto attacks and abilities, or having weak damage on abilities and fantastic damage on auto attacks. The balance point between these systems comes down to weighing the value of their unique focus areas.
These systems still overlap somewhat through attack speed, so they are not entirely decoupled. In order to make maintaining the systems easier for live balance, they would have to remain as strongly decoupled as possible. That means that they should overlap as little as possible. Currently the best oh hit effects also scale wonderfully with armor pen, which means they also overlap at least as much as both attack speed and armor pen overlaps, which is not ideal.
Ideally, the on hit system should not scale with the pen system, which specifically increases ability damage. The only way to make options available in the on hit system that do not scale with pen is to make their effects stronger with lower pen or ignore resistance entirely. The most rudimentary way to make a damaging effect ignore armor is for it to do true damage, but there are other ways.
To make an effect stronger with lower pen, it should be stronger with more damage dealt before resistance and less damage dealt after resistance. For example, a percentage of the damage reduced by enemy armor can be returned as health to the attacker. This effect is obviously weaker if the enemy's armor is less effective at reducing damage, therefore it is weaker the more armor pen you buy, so it is effectively mutually exclusive with armor pen.
I believe that if on hit effects in general are not treated as their own separate system, then an exact repeat of the hybrid itemization fiasco will occur. Interestingly, if on-hits become supported as a full blown system, then what we currently think of as "AD" itemization effectively becomes THE hybrid system. It is the system who's purpose is to enable increases both to damage on auto attacks and abilities for champions who have "hybrid" (read-- AD scaling physical damage) abilities. Essentially, supporting on-hits as a system kills two birds with one stone.