Gear will be normalized, everyone is going to have the exact same item level on their gear. This is a skill based exercise and your gear doesn't matter.
How is this going to work honestly? If I put work into block capping or having a certain dodge:parry ratio will that all be ruined? I appreciate the thought but please hands off my stats.
I'd like to decide how to gear for these encounters that's always been part of the fun of RPGs and suddenly trying to turn things totally skill based is ridiculous. Just have the game load up a ROM of Mario Kart if that's what you want.
edit: yeah I know it's challenge mode only and since more stuff has been updated on it gear won't scale up or down but simply be preassigned stuff.