I'm not sure if this is a bug or just a case of an overtuned encounter, but I talked to a few other people on reddit about it and they thought it was worth reporting. I'm currently doing my first real playthrough of the game, on Path of the Damned difficulty with Only Upscaling enabled.

During the Sealed Fate quest in Neketaka, after picking up Degnos' satchel in the Bathhouse, while travelling to Queen's Berth, you're confronted by Talfor and his crew. I did not decide to resolve the encounter peacefully, so a fight ensued. My party was level 6 at this point. When checking the enemies, I saw a whole lot of skulls (attached screenshot "potdupscaled"). After a few failed tries, I got curious and completely turned off Level Scaling for the fight. Suddenly, no more skulls (see attached screenshot "potdnoscaling").

 

Why is the game scaling up enemies to a level above the current level of my party (in the case of Talfor, at least 4 Levels above)? The way I understand it, upscaling is supposed to kick in when the party is overlevelled for an encounter, and is supposed to raise the level of enemies towards the party's level inside of a +4 range. How is it then possible that enemies, which are equal to or below my party level without Scaling, are scaled up to 4 or more levels above my party?

 

How to recreate:

PotD, Only Upscaling difficulty. With a level 6 party, accept the quest "Sealed Fate" in front of the Luminous Bathhouse in Periki's Overlook, Neketaka. Pick up Degnos' Satchel in the Bathhouse, then travel to Queen's Berth to trigger the encounter with Talfor. Punch/Attack Talfor during the conversation.

Enable/Disable Only Upscaling to check the discrepancy of the enemy levels shown in the screenshots.

Ekera, this is not unique to this particular encounter, I say. What upscaling does should be better clarified in the in-game description.

Ekera, this is not unique to this particular encounter, I say. What upscaling does should be better clarified in the in-game description.

so I am not encountering some unique kind of bug here? my game files are fine?

 

Ekera, this is not unique to this particular encounter, I say. What upscaling does should be better clarified in the in-game description.

so I am not encountering some unique kind of bug here? my game files are fine?

 

 

I can't be certain, but I had similar situation occurring to me before. You just have to avoid these difficult encounters at low level in PoTD with all upscaling only.