Maybe it's just my own inability to see past her usefulness but the more I think about it the worse I think her ability is. It's just too much of a one-trick pony honestly. Erasing people's existence from everyone's memories can be such a double edged sword. Just think about it. Let's say she does succeed turning Shanks into a toy, the moment she does that, everyone would forget about Shanks' importance. All toys are equal because they've all been forgotten. Meaning no one can tell which toy is a Yonko and which one is just some fodder.

A strong man like Kyros can just hold his own until eventually there are too much toys to handle. On a long enough timeline, the chances that Sugar gets knocked unconscious becomes 100%. Doesn't matter if it takes 10 years or 100 years, it'll happen to her eventually. That's when everyone gets turned back to normal. So all Sugar really did was extend everyone else's lifespan.

Another drawback is the more toys she makes out of people, the more they become aware of her abilities and the less effective it becomes. You see what I'm saying? Eventually everyone in the world would know about this ability which would ironically render it become completely useless because no one would fall for it at that point.