Gotta be honest - I think you should work on game feel first and then bother with the gimmics and various systems. Cuz right now it feels worse than morrowind combat.
Didn't read the wall of text behind the start point, and the "small note" is multiple pages long.
It's extremely barebones. Fighting doesn't feel good. In fact - it doesn't feel like anything. Death isn't programmed in the game yet - but even then - it took me a couple of minutes of standing still to get my health to zero. Well, not exactly still - I had to move a bit to make sure the slime hits me.
That's kinda unacceptable IMO. If your game isn't supposed to be an action game - then you need a proper tutorial to let the player know how gameplay works. If it's an action game - then you should prioritize action first.
Right now - it's extremely raw. There was one suggestion from the stream chat - "Make one small room with a slime and make fighting it interesting before doing anything else", which I think is a great idea.