As a SH fan myself, Silent Hill will always be best when the peak optimal way to play the game is to never engage in combat, except when a boss battle forces you to engage in combat.

In the original SH2, even the tutorial fight was optional. You could get the plank and then just leave without fighting. Technically speaking, even boss battles don't need to be fought. The bosses will defeat themselves after a certain amount of time. Thematically speaking, this is way better than turning every random person that wanders into Silent Hill into a super soldier mass killer by the end of each game.

It also keeps the tension high. Combat every 2 seconds becomes tiresome and does not allow tension to build in the player. Silent Hill could build tension without enemies even being spawned in, but a good day to ruin this is to litter the game with combat encounters.