Yeah. The game's no fun on it anything harder than normal. I did it on challenging because I wanted to have a legit playthrough where enemies do normal damage and not something that is reduced, but the game is balanced around your characters taking reduced damage. It was absolutely no fun I'm challenging for me.
That is exactly what I don't want for bg3. I don't want them creating this game balancing it with some Homebrew rules and then giving players a D&D 5e difficulty setting but making it so hard that it's frustrating. Only to then have them say "see we gave you 5e difficulty setting. What are you upset about?" I'll be upset because they created it balanced for some non-5e rules, said it was a 5e game, but then only gave us 5e rules in an unbalanced gameplay that makes it very frustrating to try to get through. If you're going to make it 5e, make it balanced for 5e. Don't give me the option to play 5e but have it totally unbalanced and difficult to get through.