in games like wow where the more powerful you get the harder the enemies become, this reduces incentive to get more powerful. its a simple consequence so im not sure why they do it - probably to keep "time played" metric hovering at the desired level. which imho backfires when time played becomes 0.
You're only looking at one side. Dynamic difficulty also allows players to progress by lowering the health of a boss they've failed to beat for over two hours.
Casual players giving up was a problem that no amount of shaming managed to fix ("haha skill issue, sucks to suck").
How is it a problem? Giving up is absolutely fine. Different games are made for different types of players. Who cares what the others think (or you think they think). By trying to cater to everyone you satisfy nobody.
Just make it a concrete option then. What is the point of being sneaky about it?
Probably because some people want to feel like they're succeeding in the 'actual game' and not the 'Fisher Price version of the game'. For those people the solution is ultimately to make their reality appear to be that, even though it isn't.
Yeah, Hades did this with God mode and it worked very well.