Example: In the form of a domestic cat, I walked into the ruined town where the goblins are on the roof.
This triggered combat. Should it really though if for all intents and purposes, you appear to the goblins
as a harmless cat. I personally like the idea of sneaking past things in the form of a animal such as a cat.
Yes, you are appearing as a harmelss cat ...
But you are appearing as a harmless cat to sadistic goblin a**holes that are shooting birds down, and throwing sharp rocs at caged bear, just for fun.

Doesn't the cat description say it can move through an area undetected? Without that ability, the cat is an absolutely useless form.
https://baldursgate3.wiki.fextralife.com/Wild+Shape:+Cat
Not exactly ...
Cat have best statistic for Sneaking ... it dont mean you are completely undettectable.