Luck should function like an invisible mana pool and it gets used up when you fight enemies to give you critical strikes or give them critical failures.
Luck regenerates some proportion of the pool over time, but it's also used up when loot is generated to make the loot you find better and it also makes charisma checks easier, it also affects crafting outcomes and so on.
Luck is all encompassing, but it's ultimate weakness is that it can't be focussed or leveraged at will, unless you're a high level luck cultivator. And fighting many other lucky people will eventually exhaust your luck.

Cultivation settings have a much better setup for being a game, despite isekai setting being based on game.
Because when you take away the 'cheat' aspect of isekai settings, they're for the most part painfully generic and reliant on game tropes which are overdone in games.
Cultivation settings are equally reliant on tropes, but those tropes are not game tropes and would not be overdone in the context of a game.
The problem for me is that so far cultivation games always take the sandbox approach, instead of the RPG approach.