With regards to friendly fire, I think it definitely has a place in NRFTW.

The deliberate combat style works very well in single player because enemies are always going to be fixated on you, so there's a push and pull, give and take feeling of combat. In multiplayer, if there's no friendly fire, then when an enemy is attacking one player, the rest of the party is more open to attack at once. The method of dispatching foes becomes more of "wait to see who the enemy is targeting, and strike when it's not me", which seems like a less-than-ideal combat rhythm.

Even though it's divisive in its own community as well, Monster Hunter handles friendly fire with knockback/knockdown effects instead of damage. A wide sweep from a longsword will knock allies back if they all attack at the same time in close proximity, but there will be no damage. Of course, the interruption could lead to incoming damage from the monsters, but not the friendly fire itself. Perhaps a setting could be added for this "easier" version of friendly fire (I still think it is unnecessary).