I'd count myself in the camp that is discouraged from combat in the default game. It just does not feel worth the hassle to fight the supernatural entities in many cases with how little, or literally nothing, that they drop much of the time. Personally, I find using the Betterloot mod actually strikes a reasonable balance and makes it so I don't feel like I'm wasting time and durability for little to no payoff. And this issue trickles down into other aspects of the game as well, as it makes temporal vortexes and storms more of an inconvenience to be avoided rather than engaged with if there just isn't a reward proportional to the time and risk.
Other than that I'm generally fine with combat in the game for what it is. I wouldn't want combat to be overly complex or active, in fact I'd be put off from the game if the combat were more active. I'd mostly like more variety of enemies and ways to engage them with new weapon types, although damage types and different resistances could be an interesting addition as well if done properly. My main gripes are balancing related, such as bow torn spawning too frequently in some cases and their attacks having too much accuracy. Or animals and entities in general not having enough passive sounds to announce their presence and as a result ambushing you from seemingly nowhere because of it. Bears should not be able to silently pass through foliage.