I believe that for majority of users, the change made it more user friendly. However I understand your concern. Anyway, there are couple of shortcuts you may not have noticed:
1) You can double click the Transfer settings panel (display) to bring the custom transfer settings dialog.
2) You can configure common transfer settings presets (or use predefined text/binary presets) and easily switch between them from main window toolbar and/or copy dialog (using button or right-clicking the transfer settings panel).

In WinSCP version 4.0.7 or lower, the file transfer option dialog box has a button for seeing more or less transfer settings. It is convenient for me to transfer files between Windows and Unix (Solaris) since I do a lot of file transfers throughout a work day. I may transfer text files one minute, but binary the next, or a combination of both in any one session. I can also change the file permissions transfering to Unix if needed.
Now the upgrade to version 4.1.6, there is no such buttons anymore. To change a file transfer setting, I have to do two clicks to get to the Custom transfer settings where I can change the file permissions and/or file mode in one place.
Can you bring back that option with the More/Less buttons in the transfer option dialog? Or make it possible to set the Custom as the default.
Thanks in advance for your response.