The first time I triggered this encounter I just ignored the Redcaps and followed the Hag down into her lair. They all despawned and I didnt have to fight them. On my second play through I ambushed them while they were still in sheep form. In neither case did I feel like the encounter was broken or overpowered. Now that I better understand the mechanics of the game, almost nothing in early access seems difficult at all.
Right. Once you realize that the game design is centered around, height advantage, broken backstab, broken stealth, and broken push, almost all of the encounters become trivial except for one or two