On a pure ROleplay concern, it should not respawn ... I mean "hey guys, I killed everyone here, do you want to come at the same place ? "
In your playing time, saying one year (in the game, and i'm unsure of it), Some wolf shall come back, but no goblins ... or humans (1 year is not enough to make people come back in town, I think)
But hey, it's not realistic, so, the dev may do what they want ^^ and no respawn in the global world seems to be an idea you can be happy with. No farming here, the idea is to live a great story. There is no point in tactical combats if you are overpowered (even the fun flies away as you destroy everything in one attack)... Yeah, on FF7, it was fun though, but there were the ARMS.
And, for farming, the forest should be here, and this is cool too.
