Your power manifests itself in ways you don't control.

You mentioned that your power manifests itself in a way that could be useful to you, but who is defining what's useful? If you're drowning it's pretty obvious that gills and fins might help.

However assume your entire city is about to get nuked, your power may manifest itself by making you bombproof and radiation proof, or allowing you to teleport away. You can now save your own life but this does absolutely nothing for your desire to save the city.

This has interesting implications in story terms as it creates a hero who is infinitely powerful when it comes to self-preservation, but frequently helpless when it comes to saving others. Their ongoing journey as they learn to adapt to what they're given to try and help others would be fascinating.

This might not be the answer you're looking for but I'll give it a shot:

Apathy(or the Doctor Manhattan Solution)

Your character is essentially a god, so why shouldn't he have the viewpoint of one? He doesn't act often because he no longer sees things the way humans do. When he does act, his "heightened" perception has also made him extremely aware and mindful of all the minute details of the consequences. Hence he tends to work in mysterious and/or subtle ways.

Comprehension and adaptability are your problem.

You might spontaneously gain the ability to breath underwater, but you're not going to realise this until you suck in enough water to kill yourself otherwise. You're still panicking and thrashing around basically until you would otherwise drown.

You might not have any cue that you've gained a power, so if you're falling off a building and spontaneously gain the ability to fly around like superman, you've got to realise this and make a conscious effort to do so otherwise you slam into the ground as normal.

If you're not constantly experimenting with your powerset, you might not know what you can do and therefore routinely miss out on opportunities that you could have taken advantage of.

You'll never know your own limits either because you won't have time with the powers to push them.

You might see a kid and a grandma about to be hit by a bus and have to make the decision which one to save with your super-speed..and not realise you're perfectly able to save both of them if you tried to run a bit faster.

You might dodge the shot you could have tanked, things that can't harm you make you flinch.

And then there's super-senses.

The setup of Man of Steel played a lot on the way superman adapted to his ability as he grew up, and the other kryptonians that arrived on earth as adults were really unused to their newfound strength and super-senses, they found super-senses truly disorienting and had to take time to acclimatise.

You gain and lose new abilities all the time as you need them and constantly become disoriented. "What's this new colour I'm seeing?" "Oh god I can see inside people!" "What the hell is that annoying sound?" (said annoying sound turns out to be the ticking of a clock in the next building)

The shifting power-set will be confusing, disorienting and at its very best you'll be permanently learning and relearning your limitations.

There's your balance factor :)

Sort of reminds me of that film Bedazzled, where the protagonist would ask something of the devil, but every time it was always skewed in some way against him.

For instance, perhaps your hero is off the coast of Japan, at a large boatyard, being pursued by a gang of gun toting men intent on his destruction for some past slight against them involving another 'superpower', the hero transforms into a gilled aquatic subhuman and dives into the waters below, meanwhile the pursuers acquire a boat by illegitimate means to continue their pursuit. Then your hero comes across a whaling boat and other trawlers during his escape who also decide to come after him.

Just set your hero up so although the power may be good for one particular situation, it might not be best suited for another, so odds eventually stack up against him. Like being chased through a field, transforming into a crow and then being shot at by a nearby farmer.

Something like that. Unless you want the hero to do everything, wreck every opponent and have little challenge, you'll find some creative way.

Assuming there is a limit to the number of powers you can develop at once.

The power gives you the powers you need not the powers you want.

You want to save the city, you want to stop the bank being robbed, but you don't need it to survive. sure this makes you strong in combat and you won't be defeated but that does not mean you save the city.

lets say you are fighting a super powered villain who fires powerful lasers from their eyes, sure it would be real convenient for you to become immune to damage, but what if instead your power makes you 100% reflective. Great you are now a human disco ball shining lasers of death in all directions.

maybe you get poisoned, sure producing an anti-venom is a no-brainer, but what if the ability you have developed is the ability to transfer your ailments to people nearby or expel it as a gas cloud.

This can be even more limiting if his power doesn't work the same way each time, sure last time the knife just snapped, but maybe this time you are just going to regenerate after you pull the knife out.

You are powerful, you are good, but you are forced to be chaotic good.

The lack of choice in how the power manifests is a limit. One that you can make quite debilitating if you choose.

If muggers pull guns on your family a godlike being might stop time, or put up a shield around the whole family, or affect the attackers minds or come back from the dead and resurrect the rest of the family or kill the muggers with a super fast and super strong attack.

Your character might become bulletproof allowing the family to die or teleport away allowing the family to die or even burst in to a super hot plasma melting the incoming bullets, incinerating the muggers and the family.

Even one such incident might result in a character who is afraid of what might happen if they are put in a situation where a power might manifest and will try hard to avoid that.

That could even be a part of the power. The character gets what they need but in the worst way possible.

The mechanism doesn't come for free, but takes a toll on the hero's body, consuming energy: i.e. they can get gills if they are drowning and reach the surface, but then they won't have enough energy left to also start flying. If they overuse their power they get practically consumed.

In this way the power is naturally limited, and the hero has to carefully choose when to use it.

BONUS: in this way you also self-prevent super recovery, because obviously it cannot be used as first.

Unlimited diversity is not unlimited strength

Simply make your character's superpowers relatively weak compared to superpowers of others capable of doing the same thing. For example, your character can do telekinesis (because he can do anything), but he will typically lose a purely telekinetic fight against a dedicated telekinesis wielder not capable of any other superpowers. He is the ultimate jack of all trades and master of none.

Depression

She's ageing more noticeably every day, while I am standing still.

I prefer the stillness here. I am tired of Earth, these people.

I'm tired of being caught in the tangle of their lives. — Dr. Manhattan, Watchmen

So you have everything you could ever have wanted. You are invulnerable. You can fix any malady. You can do whatever you want.

...and that is such a lonely place.

You have no-one that can relate to you. There is no-one that can ever grasp your situation. Instead everyone comes running to you and ask — no, demand — that you take care of their problems, while they keep scheming and quarrelling and arguing in their petty ways.

Sure... you can dive head first into every situation. But what awaits you tomorrow other than more trouble to fix? As the cynical adage goes: "The reward for work done well is more work". There is no struggle. No hurdles to overcome. There is no reward for feeling your effort was well spent.

Unless you have a superpower that protects you from the human condition itself, you will be depressed and apathetic soon enough.

Add a system of Karma regarding people who have powers.

Imagine that for every gift a person has, a trial awaits that person. Someone with super high telekinetic abilities might be cursed with muscle atrophy. Someone with super strength may suffer from a perpetual hunger.

Then have the trial proportionate to the ability. Say someone can make flowers out of thin air, just like a magician. They are cursed with being bad at cards; like losing 95% or more the time. Inconsequential powers have inconsequential trials.

But strong powers have larger trials. A superhero who can shoot powerful lasers may be blind, or be forced to face a super villain who has an equally strong force field.

So basically whenever he activates a power, he also activates a trial that could either be permanent like being bad at cards, or only lasts until the power ends, like being able to breath underwater, but for the duration of the power sharks will try to eat him. So activating his power is not only dangerous because he could get a strong power with a permanent trial, but a temporary trial that only lasts as long as the power may be as deadly as whatever situation he's trying to avoid.

Addition: The Karma could also build up into a climax type moment, like the more powers he uses, the stronger the anti-hero gets. He could periodically face off against anti-heros so sometimes they'll not have that much power because he has low karma, but sometimes he may use his power a lot in between anti-heros, leading to a very powerful anti-hero to overcome.

Don't gain it, borrow it

You don't get your new superpower out of nothing, there's someone somewhere that loses it. For example: you develop gills but some aquatic creature develops lungs (effectively killing it in most cases); you gain the power to control fire but some supernatural being loses it, and may not be happy about it.

This may lead to angry supernatural entities and moral problems for unwilling deaths you may cause when borrowing powers.

A large part of my answer is already covered by MGDavies, Ruadhan, and others, so I'll skip to the unique part.

The power is too helpful

Worried that your date will like you? Now you have pheromones!
Worried that you will fail your test? Here's telepathy! (Which is horribly distracting, and you're too ethical to use it to pass the test)

Your power keeps giving you "solutions" to problems that are better solved by mundane means.

Seems like horror Outer Limits episode The new breed

Nanobots can repair your body and create new features. But they are not undoing them. They are creating features you did not expect or want. So slowly you are transforming into a monster.

Also this nanobots need time to decide and implement what you need - first you drown, they repair the damage and only then they transform you so you can breathe underwater, so you did not have superpower in the moment of need.

From your description, you've made it sound as though this super-power has a kind of personality, perhaps you should build on this concept.

The power could be fickle and distractable, often giving half hearted or short-term solution to problems which can cause their own problems (like having a god-like dog that you have to train well and hope it will fight for you)

The power could have strong self-preservation instincts and try to keep its host safe and away from danger at the expense of those you are trying to protect.

Or, contrarily, it could thrive off danger: It seeks action and drama and often puts its host and others in great danger to amuse itself; having no allegiance to good or evil but just a desire to be entertained

Persistent Novelty

Just from the situation that you've described, "it comes up with the power to create combustion at will, which I can use to rocket propel myself." So, you are falling and need to learn how to control a new power which makes you a jet engine, before you hit the ground!

Imagine how traumatizing it would be to suddenly not need oxygen! Then to need it again once you'd become accustomed to not breathing.

This sounds like a recipe for disaster to me and a creatively diabolical one at that. Your character is given the perfect power, but doesn't understand how to use it. At just the moment they gain some mastery over it, it changes to something else. BRUTAL!

Severely limiting. Rather than being a god, this character is always one step behind. Not only do they need to figure out what their power has become (it's not like someone tells them), but they need to figure out how to activate and control it. By the time they have it understood, someone else has done all of the heroing.

The awkward, ineffective, learning-to-control-their-powers phase is essential superhero prerequisite. Your hero is stuck in this phase forever, sadly, comically, frustratingly, self-defeatingly.

Sounds like a relatable and interesting hero.

Direct power limit. For example you have already arranged powers in percentiles, and each percentile has a certain maximum power it can offer. So if you need to be breathing under water you can, but if you start going deeper and deeper the pressure starts rising and your power eventually cant compensate anymore.

Time bound. It takes a while for your body to adapt. If you already have an ability active it takes longer for your body to adapt to a new one. This makes it relatively easy to adapt to the beginning of a crisis, but as it drags on and other powers are necessary your hero will need to make due with what he has. this allows a large variety of challenges for your hero depending on what happened before. In combination with a power limit the hero might be able to divide the power across multiple abilities but have to pick and choose, meaning he wont have the full benefit of some of the abilities he gained and still has to struggle.

Energy drain

Switching from one power to another costs him energy, which

1. is the same as a normal human's energy reservoir and returns after a normal human's energy refreshing rate, ie. sleeping, eating, energy drinks, etc. This will also weaken his power when he's generally out of energy after a night of partying for example.


2. is not the same energy reservoir but a superpower reservoir, that refreshes over (non-switching or non-usage) time, so he's not able to switch moment after moment but only after some minutes or hours. In battle, fighting two opponents with different powers, this causes him huge trouble.

This could be refined further, you could allow him to add in additional powers but this will limit him to the set union of these powers. After he switched to earth, he might be able to add in fire, which allows him to create a volcanic eruption but no longer allows him to cause earthquakes or blast a darting flame out of his hands. This would allow him to react to new dangers within the "cooldown" but with a tight limiting factor, so it's a constant balance and tough decision. It may also cost him additional energy, but much less than a complete switch.

"As needed" is awfully unreliable. Here is a spoiler about a superpower in the "Dr McNinja" comics:

Chuck Goodrich is a time astronaut incidentally protected against attack by an awful powerful spectre, a Nasaghast. When he tries to save the world from a terrible future, his coalition is put to pieces by a terrible monster that isn't interested in him. So his protective power is not interested in interfering. This ends badly for him.

A few thoughts:

1. What if your hero’s powers manifested in non-life-or-death scenarios? Maybe he’s got to do some public speaking in college, and he gets super nervous being the centre of attention, so his superpower teleports him away uncontrollably, or forcibly deafens and blinds everyone else in the room. Or he’s startled by a car horn and he accidentally produces a six-foot radius forcefield that vaporises everything it touches. It’s fine when he needs to respond to actual emergencies, but from day-to-day, it’s just really difficult to fit in and function normally.




2. Maybe his superpowers don’t switch off until the next urgent situation. He’s been dropped into the sea and now has gills, great. Unfortunately, his powers now think that he’s safe, so they force him to stay underwater until the next crisis. If he tries to get out of the water, he gets teleported back in because that’s the environment his body has now adapted to. He’ll have to wait until a meteor plunged into the water next to him in order to develop flight, which he then can’t switch off until the next calamity.




3. You say that his superpower creates a power for him to use. What if it doesn’t tell him what it is? He has to use all his ingenuity and imagination to work out what power his survival instinct will have given him in this scenario, and only then can he actually use it.




4. This superpower polymorphism is super exhausting. While he’s being super, sure, he can fly, breathe underwater, glow in the dark, and be immune to all poisons. But once he’s averted the crisis, he effectively goes into hibernation. Some sense monitors the outside world, ready to kick in if he’s endangered, but he spends most of his time trying to consume enough calories and feeling perpetually sleep-deprived. He struggles to hold down a job, finds it hard to maintain relationships, and has no spare time or energy to pursue other activities or interests. Maybe for this hero, it’s about learning how not to use his superpower, because he strives so desperately just to lead an ordinary life.

Limitations

There's a finished web series about superheroes, Worm, where one of the strongest heroes had a very similar power. (Mild spoilers ahead about one character powers)

He had three limitations: only three different powers at a time (so he needed to let go of one power to gain a new one, and no foreknowledge of which new power he'd get), powers having a build-up time (starting weak and being god-tier after some minutes) and the overall strength of the powers diminishing as he aged. With this limitations and some character flaws his character arc felt compelling even though his power should have been an "I win" card.

So you can get some inspiration from this and add some limitations to his powers and an exploitable character flaw, and you have yourself a strong but still relatable character.

As for specific examples I found the "let go of a power so you are given something more appropiate" excellent, especially in rapidly-changing circumstances (you are on a house fire, do you let go of super strength so you can get ice breath or something similar but lose the ability to lift big piles of debris?). You could make it so his power isn't generating the powers in a vacuum, but takes them from someone else, and have him realize he just stole super-sidekick telekinesis as he was fighting doctor-evilguy. Or maybe he has to use the powers he gets, no matter what, so if he just got laser eyes and mecha-godzilla died of a vanishing stroke he need to raze half of the city with lasers. Just find something that fits in your world, and creates good opportunities for stories.