In my opinion, the difficulty is overtuned and there are a lots of thing that needs rework.
The biggest reason why this game is so hard is [...]
On Normal I think the difficulty is fine, but I think that once you get to Stage 3 the game changes a lot. Suddenly you have a weapon and you don't need to run and hide as much. The only enemies that are a problem are the two Orcs. You're given so much ammo that Goblins are just an inconvenience. Not to mention that Teleportation Scrolls are added to the loot pool, so you now have a literal get-out-of-jail card. It kind of ruins the idea that things are supposed to be dangerous and sneaky.
Normal has an inverse problem of Hard difficulty, in that nothing's cursed so you just get tons of stuff. If you wanted to stay on Stage 3 playing Goblin Slayer before Stage 4, you can just get all the HP potions and TP scrolls you want. Loot's still semi-randomized (according to the readme) so it would take a while, but I had 4 or 5 HP potions for Stage 4 and that let me just brute force my way through (while getting fucked a bunch).
Stage 4 right now is probably the weakest. Nothing adds bondage, you don't get imprisoned on capture, Slimes don't chase, and the only way to hide is by finding untainted cave areas. Given that the game's not finished, the dev'll probably put in some kind of tentacle bondage, so it'll probably be improved later.
Stage 2 is basically the perfect difficulty. All the enemies follow a set path and there's lots of rooms to hide away in. If you get stuck you can even carefully follow behind the Orc. It's even has a Top level and Bottom level so you can quickly escape if you're really in danger!
I'm (slowly) trying a Very Hard run right now, and there's already fun changes. Orcs want the doors closed so you can't just leave every door open, and Goblins smell you out so you can't just wait around. I made it to Stage 2 and it'll be fun seeing how the crossbow works, the damage is reduced so you probably can't 2-shot Goblins anymore!