Yeah, I agree - it is balancing issue...
The concept is that "day" is when hero lives in physical form and "night" when just soul is being available, ergo hero is killed.
There is also a feature where the hero has better stats if the soul condition is near the maximum level. Because of that, the hero moves faster (actually is sprinting...).
Going to upload a better-balanced version when jam is over. Thank you for feedback!