Hard times is most useful, and is most intended for use, with the ambush in Ent. Dist. I and the three fights in the gauntlet of Ent. Dist. III. If you have any left over, you can obviously use it as you like.
You should always go into a fight with full HP and Energy. Doing otherwise is risky. Having done that, it's all about crowd management and speed. It's a race to see who can get there first: you to eliminating the hyenas, or them to getting you under. If you fire off Hard Knocks until you run out, then use your single attack to pick of stragglers quickly, you should usually be able to eliminate a group of three before they get you under. Not always! But 80-90% of the time. The Dazzle stun (not the item) messes with this, and sometimes you get bad RNG. But it usually works fairly well.
The dazzle stun hard-coding is actually reverse: They're just prevented from using it until the second turn. After that, they use it whenever RNG dictates. They're also forced to use it at least once every five battles, and forced NOT to use it after 3 battles they have used it in, to guarantee some kind of relief from bad RNG.
So let's take one example, going off yours:
First turn, no daze, you get in a Hard Knocks. None down, but several weakened.
Second turn, daze. they get you up to 100 sub while you're stuck.
You come out of it. You do another Hard Knocks. Most of the time, this will take down AT LEAST ONE, often two of the three. Let's say you're unlucky and there are still two standing.
Could those two go 1. Open status 2. Hypno ? Sure, but that's unlucky RNG and it's not guaranteed. There's at least a 50% chance that they WON'T perfectly line up their moves like that.
Let's say they go Open, and the other whiffs with a regular attack. You can now unload with your last Hard Knocks, which has a good chance of taking them both out. If you only get one, can he now take advantage of open and pull you into hypno? Sure, but again, not guaranteed.
The general take-away here is that yes, some of this is dependent on RNG. That's intentional: there's supposed to be a certain amount of unexpected and uncontrollable risk. Sometimes you're just screwed (heh). But if played right, you should be able to mitigate the damage a lot. The overall goal for Ent. Dist I was that a player, trying moderately hard, should be able to get to the end with only one defeat (ie going back to the plaza). Trying a bit harder, that player should be able to get all the way through without any defeats, though this will require a few re-tries from saves. And in my playtest this seemed to be roughly the case.
Bottom line: you shouldn't NEED a Hard Times anywhere but the ambushes and final gauntlet, but since you have extra, you certainly can use it as a get out of jail free card to avoid having to savescum a particularly unlucky battle.
I will admit the Trainer mobs are a bit spooky, and if I was in a hurry that's probably where I'd use my extra Hard Times. Try legit, and if damage isn't happening fast enough, just say fuck it.
Using Hard Times on the boss is unintentional, and I'll probably gate off Dazzle Blast from that fight eventually.
Again, I think we may be defining "loss" differently: I mean actual defeat. You can go through a sub cycle and still win the fight. After...four cycles I believe THEN you lose, but unless you're really slacking it shouldn't get that bad too often. You seem really intent on avoiding hypno in battle altogether, in which case either use the charm, or the keys (italics to make this stand out in the sea of text, not to be snarky).
I don't entirely follow what you're saying in the last paragraph. What I was saying was that when the player comes to the final gauntlet, they'll need at LEAST one dazzle blast for Hard Times, ideally more. With one, it's possible but tricky. Without at least one, I'm doubtful it's possible. But there are MANY Dazzle blasts, and only one fight that you absolutely, 100 MUST use them on. I've won the ambush fight without using them (though it's a pain in the ass). So if the player comes to the final three fights and they have ZERO dazzle blast, they fucked up somewhere.
Overall, I feel like SOMETHING in your overall strategy is missing, though I'm not sure what, and I wish I could be more helpful. I've played through Ent Dist I multiple times from beginning to end with this play mode (regular fights with hypno), and while I did have to reload a few times (Maybe four or five overall?) it certainly wasn't to an infuriating degree. I don't just trust my own experience of course, but I'd expect my beta testers to give me an earful if it was as punishing as you're experiencing, and I didn't really hear anything. My general concern with that section was actually that it was a bit too easy, which is why the dazzle/daze ability exists.
Sorry I can't be more helpful though. I will make a note of all this, as one more data point, and if similar complaints come in I'll certainly consider reworking the balancing.