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Cyberpunk 2077 is a better role-playing game than The Witcher 3
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Everything Cyberpunk 2077
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If you don't want a power fantasy:
Play on a harder difficulty level, turn off aim assist, change the recoil to affect 'on camera' not 'on weapon'.
And/or turn off every element of the HUD, or maybe just leave a few parts for yourself. No more threat indicator noises/sounds, no more minimap, no more hit confirmation, no more knowing how much damage you're doing.
Not a panacea, there are still, imo, flaws with how the power scaling works, but those would take mods to address.
But yeah, try playing through on Very Hard, might feel a bit less like you're a overpowered super merc.
That causes different issues.
It's cyberpunk. You're meant to have aim assist, hit confirmation, damage estimators etc. You're cybered, you're half machine, and losing your humanity to the machine to get those advantages is a core part of the setting aesthetic. Or alternatively, you don't get cyber, and you don't lose yourself to the machine, but then you struggle to survive when dealing with those who have. You see this play out in extremes in the cyberpsycho story arcs.
A cybered up merc is meant to be a small shark in an ocean of piranhas. An ocean where there are larger sharks, but also killer whales. A cybered up merc is meant to be a threat to most people on the street. But a gang of partly and non cybered folk should be a threat to the merc too. Maybe a merc could get lucky and tear up a gang by themself, but it would leave a power vacuum, and disturb a lot of people who had deals with that gang. It would be a story in and of itself. And any merc that kept killing wiping out entire gangs would eventually take a wrong step, and end up dead, or if they were good enough to not get killed by the gangs, they'd find themselves with a bullet in the back of the head, being put down by the corps who rely on the status quo in the streets to make their money.
The point being, the cyberpunk setting itself is not designed to be home to mass slice and dice combat. The slicers and dicers are the people who have lost themselves to the machine completely, the psychos that need to be put down.
tl;dr - Changing the difficulty wouldn't resolve my main issue with the game
It is a roleplaying game, with a very diverse set of possible builds and playstyles. Thats a major point of the OP article, that there are a wide array of possible Vs.
You absolutely can play through the game without getting any other cyberware beyond what the intro forces, you absolutely can play through the game as a maniac melee hack and slasher, and you can even do both those at the same time.
The last option there is more difficult, especially in the higher difficulties, but it can be done.
If your main problem is that... you can mow through factions and they don't really hunt you down, in response to you being an existential threat to them...
Well, if you want more depth there, there are mods that do rework and make more extensive both the police and gangs, how they interact with each other, and you.
I think the gang one is named 'They Will Remember', and pretty much does everything you're asking for.
https://www.nexusmods.com/cyberpunk2077/mods/19747
There are also mods that expand on the idea of the player being able to fully go into cyberpsychosis.
https://www.nexusmods.com/cyberpunk2077/mods/5646
There are other mods that rework how the Cops work... tons of different kinds of mods that rework many aspects of the game and gameplay, to make it into a much more dynamic and reactive experience, or that just fundamentally rework the entire way combat/cyberware/hacking/armor work, to be much more unforgiving.
Much like joytoys... the game can be whatever you want it to be.
Mods are great and all, but they're mods. The default setting, despite being called Cyberpunk, doesn't respond as a Cyberpunk setting should in response to many possible variations of V.
I stopped bothering with mods a long time ago, because I've found they're often too frustrating for me to be worth it. They break with updates, they don't play nice with each other, they often clash with the core storyline in unexpected ways, and they can annoying to install, and all of this has become more true since I moved to linux.
I think I'd love something like that first mod you mentioned if it were part of the base game, both because it sounds more fun and because it's truer to the genre the game is named after, but it's not enough to get me to install it and do another run through.
I also started challenge myself to be non-leathal as possible, also stopped making "perfect" builds and doing more jack-of-all-trades builds. There can be still fun, but yeah, once player reach lvl 50 he / she is basically god. Not even speaking of level 60.
There are at least two different mods that totally rebalance basically all combat, to make it more like a tactical shooter, in the sense of... leveling and stats still exist, but you can both fuck up and be fucked up much more quickly, basically TTK is much lower overall, things are a bit closer to 'realistic'.
So, that'll kind of force a lot of gameplay styles to change.
There are also overhauls for cyberware/hacking, and there's also even basically the equivalent to Hardcore Mode from New Vegas, as a mod, Dark Future, that adds in hunger, thirst, sanity, drug addictions, etc, as fleshed out game mechanics, and you can even pair that with other mods that work with it, like one where if you totally lose your sanity, you basically red out and wake up in an insane combat situation, having gone cyberpsycho.
Those solutions just make it more challenging to have fun instead of more challenging.
Elden Ring is a game where the enemy power levels are through the roof and its still fun as hell to lose over and over. That's because the gameplay itself is great and it feels great to play.
My definition of 'fun' includes what you call 'challenging'.
Different people find fun in different things.
Personally, I don't care so much for minmaxxing stats and items, as much as I care for the actual complexity of the potential gameplay situation I am facing.
I don't find the idea of having to retrace my steps from a fixed save point to be very fun... I prefer being able to save basically anywhere at any time.
Like I'm just loading into another virtu.
But, some games mix and match different kinds of 'being able to save' with other kinds of gameplay, and achieve different balances that appeal to different people.
I mean, if you're playing with a controller, yeah, that's why auto aim exists, why it was invented, because joycons are inferior to a mouse at making precise and delicate movements.
I get that you'd then just view auto aim off and more punishing recoil as ... too much.
But for all the rest of the HUD stuff... your cyberware is broken, or its been hacked, or you couldn't afford the fancy pants version.
Those could fairly easily just be worked in as elements of gameplay itself, and it even makes sense in the setting.