You could install a retractable wall or sliding doors of some sort? OR washable curtain panels mounted from the ceiling to open and close when needed.

This is a structural evil that you will have to live with. But there are ways to turn it to your advantage. You could add a false ceiling between the beam and the far wall (about 6 " or so above the height of the soffit (bottom height) of the beam. As an extension of the false ceiling, you can also add a matching fake beam on the far wall side. Then recess lights into the false ceiling. In this way, you can turn this portion of the ceiling into a feature. With this feature, you could also turn attention away from the upturned 'pit' portion between the beam and the far wall. A fake beam at the far end will not interfere with circulation space, since you could place an entertainment unit there As an alternative to the false ceiling, you could create shallower beams in wood in that portion, parallel to the existing beam

That's a thoughtful fixture for your proble. But that's a problem solver.for your important stuff To just feel more important..You can clear away the daily doable ssuch a shoe racks bed linen and other things and your storage as an e xtension for your open area...I suggest you to consider making a table out of it or having sit behind your bed, In that way you can make uss of it in somewhat reassuring manner.

Thanks for both of your responses CUBSpaces team and Shweta from Shades studio. It really gives a clarity about possible consequences. I am now doubt free about changing whole things in Bathroom as it will be interconnected. However will appreciate your opinion on few things: 1. Kitchen wall tiles: I have those from countertop height to roof(almost area of 6X15 feet) which are good and not hollow. I changed countertop 5 years back without any damage to these tiles. It might cost me another 10-15 K, but I feel the whole process and quantity of wasting old good tiles makes me little sad. 2. kitchen countertop: Made new around 5 years back. I don't expect to get it all intact. But large pieces can be cut and can be used as top for other freestanding structures like dishwasher, front load washer, heighten base cabinets, etc. 3. Plywood: I don't mind giving enough labour charges for old sheets recycle. I am planning to use doors, loose sheets(like kept on bed frame of settee frame.) or parts of big frames like settee. I am keen on reducing waste than to save money. You can see various DIY ideas by western people, who remove or sand laminates and re-paint furniture, or carefully remove hollow tiles and re-attach them. Some are also re-painting ceramic tiles. I am just asking myself: Are we creating more and more waste by use and throw approach every 10-15 years, just because we can afford it?