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I agree with your points about encouraging competition but not murder hoboing. 

I worry that only giving XP to the PC who gets the killing blow could lead to a large variance in player levels.  Also, wouldn't adding this to loot XP level the players too fast? Have you played with these rules yet?

I am readying to move my group to Shadowdark, but admittedly I have not DMed the game proper yet.

Thank you for your thoughtful reply!

Hi, yes, these rules have been used with my group - so I guess they are playtested. I agree that the killing blow for XP is arbitrary, but that was by design to add additional tension. You can easily not use that rule and divide up XP otherwise - remember that they don't get XP for weaker monsters, so even of they kill a horde of 0 level Kobolds it doesn't count. I'm also not worried about power creep like in 5e  since Shadowdark has a different level progression and HP system -- basically its fatal enough combat that I don't worry about power creep as a GM.