Oh, I'm excited! I've only been playing about five hours of the main game, but was so impressed with PoE (which went completely under my radar until a Steam sale) that I purchased the first addon as well. I've been holding off playing further because I want to experience the complete package. Seems like a good time to use my saved vacation days from 2015...
Combat remains a weak point of the Pillars formula, and it's abundantly apparent in this expansion. On the default difficulty, without allowing the game to scale up the challenge to my party (which was recommended), I still struggled immensely with average enemy groups of lowly cultists, wiping multiple times in some cases. The new monk-class enemies could dodge right past my tanky melee line and go after my squishy damage dealers with seeming impunity, for instance, and had far too much health for me to be able to focus fire them down before they turned the entire encounter into a rout. Conversely, the enemies who were supposed to be big and scary (including the towering Eyeless war constructs central to the story, and the colossal, set piece final boss) were felled with ease, leaving hardly a lasting scratch on my party.
Simply put, Pillars still does a poor job of giving you the tools you need to manage basic party tasks like tanking and crowd control in chaotic situations with lots of weaker enemies. Where these options do exist, they're often buried so deep in the corner of one of its far too exhaustive spell lists, forcing you to do huge amounts of pausing, reading, and needless micromanagement, even when your party AI settings are fine-tuned to perfection and your difficulty is set to default. It's all the worst parts of playing a caster in a tabletop RPG like Dungeons & Dragons 3.5 ported to digital form. Obsidian's combat designers would do well to start balancing their encounters more on smart tactical positioning, good party AI settings, and a shrewd class composition instead of expecting you to memorize 100 spells across six characters and always know which one is needed to deal with a particular enemy.
It's funny how differently people experience this combat, depending on their expectations. I was expecting something like Baldur's Gate I & II, which demanded near constant pausing and micromanagement, and that's what the old fans wanted. But if you were used to something closer to Dragon Age, in which you can kind of let the AI do its thing on normal difficulty, I can see how that would be frustrating. Personally, I've always really liked the Pillars combat system, though I do agree they may have gone a bit overboard with the number of abilities to activate every single battle. Baldur's Gate actually had less of this, since it was primarily just the mages/sorcerers and clerics/druids casting spells, while everyone else wailed on the enemy.
I think your difficulty with large groups of enemies, while finding it easy to take down one large foe, may be the result of your party composition. Because I had the exact opposite experience, probably because I had 2 mages, my main character + Aloth, and the large AoE spells were great at taking out such groups, but struggled against single targets. Probably because I didn't have a cipher or a rogue, which I'm guessing you did?
I played on launch and now I am starting a new game with the full White March expansion and the 3.0 update and the game really feels like the complete, polished version one would have hoped for at launch. Not that it wasn't a great product at launch, but it is really as good as it is going to get right now.
I love the game and love the changes that have been made. The combat is only difficult until you grok what is going on, once you do I would complain that it actually becomes too easy.
Great combat, decisions that really matter in how your character advances and performs, a fun setting with some great characters and interesting themes, this is one of my favorites of the last couple years. Fans of old school stuff like this are really living in a golden age and I feel like it is only going to get better.