I've come across several situations recently where it's actually beneficial for certain formation abilities to be off. Specifically, Thalia's Lightning Rod ability, Pete's Bad Joke ability, and Karen's Center of the Universe ability are ones I have wanted to be able to turn off at will. I know I can just not purchase them, but I've often accidentally hit the "upgrade all" button by mistake, and ruined my whole strategy! It would be great to be able to turn these abilities off and on, maybe by clicking the upgrade icon.

Matthew, that isn't a very helpful solution. For example, Bubba has "Splish Splash" which works best when "Synchronized Swimming" is not bought, so it makes sense to not buy the latter until necessary. Bubba is a great crusader, so it can get annoying if someone accidentally buys the ability and can't remove it. The solution isn't "Avoid the crusader entirely because maaaaaaaaaybe you might make a mistake with it." That's just dumb.

"I've come across several situations recently where it's actually beneficial for certain formation abilities to be off"

Allow me to add: Draco's Kingdom'sss Call, this upgrade could downgrade his DPS alot if he's surrounded by non royals

My suggestion to solve this is to disable/cancel the ability. I.e clicking the ability icon after purchasing will disable/cancel that ability

Kinda agree with Raymond here.
If you dont want to use upgrades, dont use upgrade all button.
When I dont want Casey Carnivore upgrade all area 145 and then to the rest manually.

Many of these comments sound a lot like "Screw you for making a mistake, you lowly, pathetic, imperfect human SCUM!!!! You made one accidental stray click and it messed you up. Comes with the territory of being SCUUUUMMMMMMMMMM!" What's with all the elitism? Swami's suggestion doesn't take away any challenge from the game, it just adds a feature that doesn't make the player's random accidents needlessly-permanent for that run.

Bloodbane's idea sounds fine to me. Instead of just clicking to buy, abilities are click-to-toggle, so once you buy them, you can click them again to turn them off. This would also help with things like daily missions. For example, clicking missions. DPS too high and don't want to wait until you reach your area limit for your current DPS? You could completely remove the crusader, or with this suggestion, simply turn off the ability that gives it all its DPS, click until satisfied, turn ability back on without ever having to mess with your formation.

As Justin mentions in point number 4 in this response yesterday, we are considering the ability to toggle skills.