It is a form of soft level scaling. I get your point that it’s not meant as a way for enemies to fully catch up with you but it is the same system but toned down a lot

Terraria technically has scaling (actually just three tiers) but it works fine. Your gear generally upgrades much faster than the scaling enemies. The new enemies are the real obstacle which feels better. I’ve never noticed old enemies becoming a problem and by the end game your ability to clear whatever random enemies stands in your way is trivial