I bought this at the weekend and been playing it with a buddy. His character is in the 30s, mine's is lvl 9. We put it on the highest difficulty because I can't stand games where you get shot 30 times and still don't die.
Suddenly it became a very different and much more intense game. If there's one thing I really hate about modern gaming (apart from endless bloody micro transactions) it's wall hacks or detective vision as they call it. It just ruins games. I can't see the point of playing a game if everything is done for you. There's no challenge. There's certainly no gameplay. It's pathetic. (Yes, that means you Horizon Zero Dawn.)
Anyway, I'll stop before I start ranting. So, yes, just turning up the difficulty improved the game 100%. We started a raid on a prison and realised we couldn't use our sniper rifles because they kept alerting the guards. We had to sneak in at opposite points, use our binoculars to judge the distances between enemies, take out the lights/alarms, we had to use our pistols because they were the quietest weapons. We had to find out who was a guard and who was a worker. It was tense as hell and the most fun I've had in ages.
The only complaint I have is I'd like an option to use a knife, that would improve the stealth gameplay.
I will say this is one game that will give back whatever you put into it. A Task Force member and I came up with our own game "rules" that we stuck to a while back for a new character, and it increased the 'fun-factor' for us a lot. There is a lot of 'self limiting' needed due to a lack of complete game customization, but it's do-able.
I say tweak whatever you can to get the experience that is right for you.
There is a knife in the Fallen Ghosts DLC I believe, but it just replaces the normal melee take-down. You can't go around swinging it or anything.