The kind of development I'd like for him is one that resembles Vegeta's character progression. He accepts whatever AFO has to offer, but slowly realizes why Deku is the hero he is. Just like how Vegeta finally understands why Goku is the stronger one of them both by the end of the series. It's why he's my favorite character in DB.
Vegeta didn't have to be evil, just not in the group in a goody two shoe way. Otherwise, he'll be Sasuke. Bakugou should be in Vegeta or not-Sasuke route. Though the real fear in my opinion is Deku himself. Yes, it's a good thing there's no Sakura of the group because that would be brain damaging, but I don't want to act like the friendship is beyond any measure like SNS.
It was ok until Kage Summit where it becomes tedious and frustrating. So here, we already started off with them not truly bonding, so acting like best brother ever in the first start is not a good move. I'm fine with him thinking that he's upset for not saving a person since he is a hero, but acting like brother for life will be not convincing.