Yeah exactly the first fight in the Underdark is supposed to establish how dangerous of a place it is. Baldur's Gate 2 did it pretty well and this fight works really well also.
Clearly it is really hard for level 4 characters. The only way I found to beat it was to sneak away after jumping from the spiders' pit and move closer to the entrance of the Selunite outpost (which will give you high ground advantage). Then you can position your characters so that they are away enough from one another so the Minotaur jump won't damage more than one. If you are lucky you can also get a shove on the Bullette's trench for 30-40 points of damage.
