Well, let me give it a test too. Party all decked in lvl 16 gear. Lvl 15 encounter.
Lohse and Ifan instantly die. Red Prince and Fane die on their own turn due to the Piercing damage effect applied to them.
I easily beat it with cheese (offer up one superbuffed teammate, then let the rest join) since after that, no more challenge. Same with the RRjja-whatever godwoken Lizard Demon on Bloodmoon island, does an Arrow attack killing you instantly. She started hostile though, so I spawned an eagle and it took the damage, leaving a pathetically easy fight afterwards.
That's just bad design. Doesn't matter how "easy" or "balanced" it is with the known trick. Insta-kill then having to reload to surpass it is just... bad design.
An example of surviving the initial hit with -40% fire resistance. In a party of 4 I would space out characters so that they don't all get caught in a single fireball and have tools like cryogenic stasis, peace of mind (to deal with madness/charmed which she likes to use) etc. You just need to survive a single hit to make the fight doable, winning in 1 turn is not required since you can use plenty of survival tools to prolong the fight provided you can have at least a single tool. Chameleon cloak is slightly less useful due to her pain aura, but it still has some utility.
Provided you can have 1 turn, you can then win the fight. This video shows surviving for 1 turn is possible.
