That is, when you take damage, some percentage of that damage takes away from your maximum health. For example, if you take 40 damage and half of it is hard damage, your maximum health would lower to 80
It can work as long as all enemies stay fair, but honestly the game didn't feel too easy, it's just that those telegraphed beam attacks are very easy to avoid when there's only a handful of them, it's okay to have enemies which are more dangerous in a group imo.