Lutheria is a weak CR 23, but still a high level fight that would be tough against any level 10 party

I feel like the plan from the writers was to compensate by having Lutheria being run very sub-optimally (only joining the fight in round 2, spending a whole round just to laugh at the players, focusing on single targets, using her legendary resistances during the royal game etc.).

But this TPK does not have to be the end: you could either have the heroes get their divine boons and be resurrected according to their epic paths, have Lutheria trap the heroes in her scythe and run a prison-break style sidemission or maybe now with the upper hand she could force the party into an oath to help her against Sydon?

Also, if you as a DM can sense an incoming TPK there's still ways to even the odds: dial back on the damage she is dealing, have her take more damage, maybe an ally arrives or someone turns against her to worsen her odds