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Yep they gave you a toggle turning every monster, into some variation of cat or other cute creature to make it harder on your conscience to kill them.
Joke aside even if they up the difficulty of overland content, only ones that are going to notice the difference are the more casual players, while those with optimised builds are still going to one shot everything maybe even be forced to two shot everything and complain nothing has changed.
Meanwhile those doing the harder group content, do everything in their power to up their damage so they can skip the mechanics that make the content more difficult, then complain build X does to much damage and nothing else is viable.
All I see happening for the harder content is them adding more un skip able mechanics such as invulnerability phases or far less likely due to potential back lash, the introduction of a soft cap on max player damage, to slow players down and make other builds viable.
There's also the argument that not every game needs to be elden ring level of difficulty. Eso doesn't need to be that. If eso isn't scratching your challenge itch, go play a game that does?