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.
To make it funnier, the kingmaker prologue is physically impossible without bending the mechanic on unfair. The only option to get through this at any reasonable time was to overuse the mechanics so that your companions could not die permanently. So you sent the gnome over and over to his death until he finally managed to kill the enemy. For some reason one of the npc (added in dlc) at this point in the game is completely immortal and slowly kills enemies during the final fight. Lack of rest is not even a problem, because the spells that have the starting characters are completely useless except for one cantrip. I will not believe that whoever tested it, even the most optimized tank I managed to create, has over 20% chance of being hit, which means one shot. 22 AC enemies are a bit too much for a level 1 character. After that I decided that Owlcat had no idea how to design fights and modified all companions to give them 25 points and a reasonable stat distribution.
As for BG3, I would not worry too much, so far in previous games Larian proved that they can design fights (at least since Divinity II: Flames of Vengeance because it used to be different before). In the worst case, reducing the difficulty level by 1 should easily be enough, although I bet that if they decided to introduce such an option, it would be tested.