As I said, there are far to many merchants for an isolated prison island. Perhaps there should be a few people, that sell stuff. But only a few stuff and really specific stuff. Somethings you perhaps only get sold if you do them a favor or you get it as a quest reward at the end. But before all, the merchants should not get new stuff at every level up and at every full hour gametime. This just breaks the whole immersion. Merchants can get back to normal, after you escaped and you are back in the freeworld, but on this island it is just odd.
Of course fights would need quite a nerf in a more dire situation with less good equipment at your disposal.
