Yeah, you need to keep your initiative topped up, or it’ll seem like the AI is cheating its way to getting the first action every battle. I had that problem initially, but it disappeared on a second play through after I invested skill points a little more widely, so I don’t think that’s an issue.
I’m also not having the problem of being forced to play a certain build to have a functional party. Trust me, I’m completely against following a design plan for the most powerful build, and my party is always a very mixed bag. Last time I played, my archer-type was by far the most neglected and weakest member of the party, but I actually liked that, as she still wasn’t completely useless, and it felt balanced.
And then there was my tank guy – by far the best in the party. Wings, shield and sword. The wings are basically self-teleport. Very powerful, so I only allowed this guy to have the skill. I'd fling him directly into the fray as a distraction, and he always attracted the enemy’s attention in this way. I didn’t notice any overly robotic behaviour from the AI, in laser-seeking the weakest party member and avoiding the tank, but it could be just my playstyle.
As for losing to the witch and having to start over – that’s a good thing, in my opinion. You want to be beaten by the AI, otherwise it’s just win-win-win, and no sense of reward or challenge. If we kept winning in life, there’d be no personal growth. Same is true of a video game.
Now you might say – well, I don’t play video games for a struggle or to lose all the time. And that’s fine – there should be, and will be, several difficulty settings, and you should be able to choose one that suits how you want to play the game. But equally, there should be a tough-as-nails difficulty setting for those that expect to lose, and don’t feel that’s a bad thing.
I will admit that for a balanced party that’s not exploiting the game, the Alexander fight is a little much. I just got lucky and the worm went to town on his crew while I hung back. Without that, I doubt the party I had would have stood much of a chance.
The game has bigger problems than combat balancing, though. Namely CC and armour. It is possible to be near-permanently stunned by a large pool of electrified water (once the stun is shaken, it just stuns you again). CC is the most unimaginative and problematic part of the game for sure – but I doubt this will be addressed before release.