I like the idea of the time based limitation - it's really excellent to counter bots. But there's some things I would do.
Firstly, switch the time allowance to a weekly bonus refreshing on Monday. This will help people who do weekend H&H binges. Give free players 14 hours a week and paid players 28 (2 hours a day and 4 hours a day respectively). This doesn't invalidate subscription for people who really want to H&H binge, but it lets free players adequately play while requiring payment for a "real" play experience.
Secondly, make it so play time isn't counted if your character is marked as AFK - automatically activated after 20 minutes. This helps people who go AFK and completely forget about H&H while still making playtime a valuable resource.
Thirdly, you need tiered subscription models, but done better. $10 for unlimited is fine, but there needs to be a cheaper option. I would recommend a subscription at $5 that gives 70 hours a week - not enough to play 24/7 (avoiding botters) but giving the average player an effectively unlimited playtime of 10 hours a day.