The b12 is certainly good for pillion duty if as mentioned you figure out how to get your passenger comfortable. Of course you can 'feel' a passenger and its not as nimble with one but it certainly handles the extra weight very well. Thats the beauty of torque.
I would never discourage somebody from modifying their bike but to be honest if you plan to put on the TL1000S front end you are totally changing the bike. The geometry will be very different, and the handling as well. Just something to keep in mind, the original bandit has what I like to call inherent stability, shorter forks alter 'trail' drastically causing a change in handling. I like it... most of the time, but it certainly is nothing like it used to be, and while I don't have my damper installed yet, I would advise anyone going with a shorter fork to get a damper.
Can it handle 'mild sport riding' certainly, but it'll make you work for it, this can be fun as long as you understand it going in. I never knew how much harder i worked on the bandit, until i rode some real sportbikes and laughed in my helmet.
I haven't had a ride on my bandit that didn't put a smile on my face, and I've ridden if on long rides, short rides, spirited rides and plain old commuting. I've ridden it with passengers, mostly much heavier than I am, and it has not disappointed me.