Confirm there are not already settings or features that do what the shop is asking for.

No, there is no such feature to set refunds to Account credits by default.

What does the shop want the product to do?

It will help shop to set a Default refund method as account credits or original payment method.

Why/how would it improve sales or efficiency?

It will save the time of shop and shop would be able to refund as account credits without going through issue partial refund step.