Well it's certainly better than before, I like how you added drawings and rethought some parts. Witch hats and brooms manages to have a unique transportation style in a game that already has 5 transport systems.
The End Witch sounds a bit too "moddy" for my liking. Perhaps you could change them to Sorcerers. The End Witch Boss could be changed to the Sorceress (or vice versa). Also, I would remove "negotiating" with the boss, when all of a sudden did evil witches become your ally? Lastly, I'd suggest you make the boss spawn in every palace, but for balance make the End Palace very rare.
As for Hidden Potential, I think it could work, but has the potential to be very OP. Right now you have to mine tons of ores just to get yourself a beacon, and that's for a limited range. I would suggest making the effect very minimal, maybe a speed hidden potential is only 10% of a normal speed potion. That way it doesn't making potions and beacons obsolete.
While I see your reasoning with server balancing, I don't think you should keep this only in hardcore mode. Lots of creative and regular survival players will want to go to End Palaces to! Perhaps instead the effect was a gamerule, so servers can choose. Hidden Potential has the possibility to work well with minigame or RPG servers.
Alright, this is just a suggestion, so no h8, b8 m8 gr8. What?
Players Hidden Potential In the end on the outer rim islands there's 1 End Palace, how would you get to the palace? If there's only one palace in the game, what if one spawns millions and millions of blocks away from the center? Would there be a system similar to Ender Eyes or Woodland Maps? Also, what would the palaces even look like?
these palaces contain aggressive Endermen, Shulkers, and Witches that are faster, stronger and smarter, they also can leap very high and team up with Shulkers to levitate while throwing potions down at the player. I think Shulkers should be unique to End Cities. Witches also shouldn't be in the end- how'd they get there?
After the player clears this Palace, there's a possibility they will find nothing, extremely rare loot, or an 'End Witch'. So if you spend countless hours looking for the sole palace in the game, you might find nothing? Or just rare loot?
The End Witch is a large Witch that the player may negotiate with or battle to obtain an 'End Broom', which allows the player to...no, not fly, but allow the player to throw the broom and teleport where it lands, and the player can pick the broom up like an arrow after. The broom cannot be thrown near as far as an ender pearl though, and has health just like tools. First off, End Witch doesn't make sense. If there had to be a witch leader, they should be in Overworld. Right now all this is copy the texture and AI of the witch, only that's it's larger. What would be the stats? Secondly, why does the broom function like a weird ender pearl? I could get countless enter pearls much faster than actually finding a palace. The broom has less range and is durable, so it isn't worth going all this way for a terrible item. And why does a broom teleport? Shouldn't it fly, or at least doing something that makes sense?
If the player decides to negotiate with the Ender Witch, they can have their potential unlocked. It is obviously hard to convince the Witch, so the player may end up using her/his items to try bride the Witch, but will then end up only getting say a Elytra with unbreaking or something. Elytras should be unique to end ships.
When the player gets their potential unlocked they temporarily gain an charged creeper aura and a sound of gushing wind will start. After that they will gain maybe 2, 3 or even 1 stat increase, it's totally random. So the player might get a 'Tougher skin', meaning they have the effect of constantly having a full set of leather armour on(this doesn't mean you can't use leather armour, your skin just becomes tougher), they might gain a strength boost, speed boost, multiple boosts, you get the idea. You said this was temporary. How long will this last? Also, don't potions and beacons already do this to an extent. Besides giving off the flawed creeper affect, this adds nothing new to the game.
That's all I have so far so feel free to add upon this idea. Also feel free to leave feedback(respectfully) and I'll be waiting for what you guys think. I think this idea is far too underpowered, and lacking creativity and common sense.