This is the difficulty select screen for...

This is the difficulty select screen for SteamWorld Heist on PS4. Higher difficulties increase punishment (mission failure penalty) and challenge/strictness (enemy numbers, damage, and health) which is par for the course. However, they also provide an experience bonus.

I find this sort of thing super frustrating and a clear indication that the game doesn’t understand what difficulty settings are for. They’re for letting players opt in to an experience appropriate to their capabilities and interest. By having higher difficulties be more punishing but award more experience, SteamWorld Heist conflates this with a risk/reward trade-off that really should be handled separately. It’s now less clear what difficulty level to pick - a player wishing to reduce the amount of time and effort required by combat may now have to grind through more encounters, while a highly skilled player may find the higher difficulties actually easier.