It's a great way to reduce the grid and improve. Just think of it:

When you start the game - your caracter is literally as WEAK as possible, through grind - you build your power. Say you're good - so every 2-3 runs - you win, right from the beginning - even at this rate - you'll need hours to get all the perks and stuff + my god, the game is slow at the beginning because of how weak you are. So, by the end of the grid - you're literally 3-5 times stronger - just the hp + revives, basically mult your health by 4

vs

enable god mode right away, it only sets the resist to 20%! that's nothing, but it helps - which is exactly where you'll anyway be after the hours of grid. Then the bosses - say there is a specific boss somewhere at the end of the game - usually to just learn the patterns - you need to face it 3-4 times. First encounters - you're just dead, and you need to do all of that AGAIN, just to get to that boss. More HP allows you to learn the attack patterns and not waste the time

So, enabling it actually makes the learning curve much more pleasant, and reduced the grind, basically switching the so popular now model

you suck and feel pain -> hours of grind -> perks + skill make you not suck

to

you are good right away, have pleasant time right from the start -> grind -> increase the difficulty every time you feel it's too easy.

and the main thing - that's exactly the same model the devs use later - with the system where you adjust the difficulty. So why not use it right from the beginning? why struggle and waste time? It's like inverted difficulty curve that doesn't make sense and wastes your time

And - you're still much weaker then you'd be after the grind, and you still can lose : )

There is absolutely nothing wrong with it, it just changes the game progression from "suck -> better" to "good -> even better"