EatChildren
Currently polling second in Australia's federal election (first in the Gold Coast), this feral may one day be your Bogan King.
I'm imagining playing Bayonetta but with farming involved because a certain boss might be too hard without the extra damage/armor. Is this the case?
No.
You keep your level, your weapons and their level, and your pod. No matter the circumstance you always have the absolute basic, serviceable build that should get you through any encounter. Certain encounters and fights may be made more difficult without plugin perks, especially on higher difficulties, but they're still doable.
If anything a good assortment of plugins can act as a massive crutch, and losing them is just a shock in having to adapt back to basics. Like for a little bit there I was rolling with deadly heal (recover some health with every enemy killed), offensive heal (recover some health with all damage dealt), and overclock (bayonetta witch time on perfect dodge), and auto item use (automatically uses a healing item when you hit a low health threshold), and that obviously put me at a skewered advantage in most fights. I fubbed it, lost my goods, and failed to recover my body and adapting back to the basic build was tough. But it was still entirely doable and didn't feel unfair.