Otto with those long ass robotic arms of his, would not be a conventional grappler, logically he could be more like Dhalsim, but doesn't have to be limited to such things, but long ranged normals should be there lol.
Honestly, I don't know, maybe he could have a super armor that can't be broken for a few seconds, or maybe he just gets some HP back and gets a free mini combo from the hit you suggested so he can have an advantage for free, but not do too much damage, or it could be something like Dark Thing, whatever it is, it has to be good enough to be worth it, but not so good it's broken.How would you suggest doing it?
I do like the idea of him getting a free hit you suggested, specially since a character like Ben would likely have slow movement (Unless the game has shared universal fast movement like DBFZ did, in which case the allegedly slow 16 could just dash around to close the distance, completely nulifying the usual Grappler weakness and one of the big reasons he was top tier early on), so him getting a hit to get his game going would help out, specially against potential zoners who usually make big, slow characters suffer.