From the very little the devs have said about the difficulty settings in Cyberpunk 2077, it appears they have focused on making the game as accessible as possible for players not accustomed to FPS games. My concern is in doing this, introducing things like Smart Weapons, will this make even "hard" difficulty feel like normal difficulty. The difficulty settings look to be very similar to that of the Witcher 3 which I also played on Blood and Broken Bones (hard) on the first play through and then Death March(Insane) on New Game+. I'm wondering given the efforts made by the devs (understandably) to make the game more accessible whether the highest difficulty would be the most satisfying on first play through.
As I understand it the enemies won't scale in difficulty (the same as in Witcher 3) so after a certain point where you become a living weapon I'm hoping it won't feel too easy. There is the option of changing difficulty in game but changing difficulty because a certain area is too hard, only to switch it back afterwards takes the fun out of it for me personally.
Im playing on very hard and haven't tried any of the other difficulties, so I can't be sure. So can only talk about my own experience on this difficulty.
In the beginning it might be a bit rough when you are new and starting to learn the mechanics, and some of the car chases where you are "stuck" can require a couple of tries. But besides that, it seems to be a decent difficulty, you have to respect the enemies as they hit hard, but they are not bullet sponges, some are ofc, depending on who it is, but in general it seems fine. And you will become stronger later on.
However when that is said, it might also be due to the AI itself, that is not always as responsive as you would think, probably due to a bug that just make them stand there. But for the most part it works as far as I can see.
So I would go for that difficulty if you want a game where you have to be a bit more careful, but without being one shotted by everything, except maybe in the start.