I know what you mean an agree.
I had my first playthrough on the second difficulty. The game hat difficult and easier moments, but the first lvl, with low hp and almost no weapons was pretty hard for a first lvl.

I say the difficulty is fine, no mean traps, no tough enemies, the enemy count is pretty low - there's really no problems other than it being the first level, you being new to the game and having nothing but bone stock weapons. If you're not a stranger to boomer shooters - it's no problem at all.

It'd be nice if the game somehow let you know that you can charge the staff shots and throw the knife if you hold fire though.
Now, I found out about the staff pretty quickly, however the knife - read about in on the internet somewhere after finishing my hardcore run.
Tried it out - it's really useful for them beginning levels, even after getting a pistol.
It's good to have a ranged weapon with infinite ammo before you get the crossbow, which makes it pretty much obsolete.

There really are a lot of tough encounters in the first level that simply don't show up afterwards at all, and that's really weird. You've got a trap door leading you right into being surrounded from all sides, the blue key gauntlet where it's all too easy to get yourself swarmed, and the two crusaders jumping at you right after the elevator where you have absolutely no room to maneuver and the enemies are invincible half the time. The surroundings are cramped, the ammo scarce, and you simply have no time to charge attacks or to swing your slow-slow axe around - you're almost bound to take a few hits while you're still cooling down.

I beat the game once already, but my hardcore runs nearly always stop short at this level. If I do manage to pull through I'm almost always fine until I accidentally throw a dynamite when there's an enemy right in front of me. I don't know why I keep doing that but I can't blame the game for it.

So yeah, maybe a little few tweaks wouldn't go amiss.

The first level has been tweaked in the beta branch.

Yes I feel the same way, even with the patch this level is very hard and the difficulty is so staggering it will make people play something else. The demon ladies really are way too hard and knock down your health extremely fast. The reliance on melee for this first mission is the handicap you have. Project Warlock throws the worst of the game's difficulty front and center as if this was a King's Field game. The dev expects people to get good or play something else. The second game(early access) is much better at difficulty

I usually complete this level 100% in less than 5 minutes using nothing but the axe on the hardest difficulty without suffering any damage. If I do suffer damage, it's always from a bat attacking me from behind following the floor trap encountered at the beginning of the level 100% of the time.

There is no reliance on melee. The secondary attack on the dagger is a charged throw that one-shots everything you'll encounter in the level. It has infinite uses. The staff fires magic blasts that kill everything found in the level within 2-3 hits.

You also get the pistol halfway through the level, which trivializes the second half of the level entirely. You can fire it as quickly as you can press your LMB and it kills everything in 1-3 shots. The level is very easy even on the hardest difficulty.