Frankly, I don't see the point of the Kill All Enemies item unless it can pop up in the wild alongside clocks and such.
Quest Rule: enemies randomly drop Kill All Enemies items
It's used to kill all enemies on the screen, including those unkillable enemies, such as the "Trigger" enemy, and the ___Shooter enemies, etc. If any random enemy would drop it, it could disrupt any set-piece events you had created.
Thus, perhaps a "No random Kill-All-Enemies" screen flag?
Or how about a second KAE item that doesn't affect the trigger, shooter, etc. enemies...just the regular ones. Along with a quest rule deciding whether or not the enemies can drop KAE2s. 😛