I did my research for a little bit. So, to have that balanced difficulty for Nioh 3 without it being too easy, play in only samurai style, i.e. no ninja style and remove living artifact, remove spirit force, remove soul core summons and also keep your character level and weapon & armour level slightly below or at the recommended level for that area you are in. Don't increase your damage too much for kodama and jizo blessing and maybe focus on just increasing elixir drop rate etc. Just ignore leveling up even if you gain a lot of amrita. Losing it is just fine if you are already at that level. You can also set the buttons for your living artifact and spirit force to something such as R1 + L3 and R1 + R3 to avoid pressing them accidentally.
I tried for a little bit and did some mini bosses etc. The tension is back and you have to learn your enemy patterns and not just smash buttons. You will also make full use of your samurai skills such as deflect, etc. I'm just sharing here for those who want to stick to the intended kind of difficulty like in Nioh 1. And I know it may be silly to strip off so much but the developers mentioned is to give players the flexibility on how they wanna play. And if one really wants to use ALL mechanics, then have to wait until NG+ and then adjust with the stone of penance, max +5, adjust accordingly and level sync. Because it will become really tough and you must use ALL mechanics at your disposal and that could be a refreshing and different 2nd playthrough compared to the samurai-only first playthrough.
Hopefully this way is the sweet spot.
