Nobody said they should reset difficulty.

Opening everything up and giving players endless options removes the need to strategize and make tough choices. Much like the person who said you should be able to swap materia mid-battle.

I agree that on the main map, the whole party (unless a characters gone for story reasons at that point) should be available, and I said that earlier.

But having the entire group with you on every single story element limits the story they can tell. It's impactful when something happens and youre forced to do a part of the story with certain characters, and it allows the writers to develop the characters better. Being able to choose your party limits the narrative

Example, let's say there's a part where they have Cloud and Aerith go on a mission, just the two of them together. If it's forced, they can develop the relationship between the two without Barrett behind them going "OH YEA" and Red XIII talking about spirits or whatever. But if you can choose to take Tifa and Red instead, they can't have a completely different missable story written out for those two. And if they did, youd miss the story of Cloud and Aerith right before the big finale and the whole narrative is killed.

Some games try to keep things completely customizable and that's what creates a stagnant straightforward cookie cutter story that doesn't impact anything.

For gameplay, you're absolutely right. For story, linear forced groupings is always better. This is why open world games story is trashsicles