If this is basically just choosing between Normal (Story) Mode and Hard Mode, why not just call it the way it has always been called? Trying to change the name to Tier 1 and 2 is the reason why people are probably confused. Just label it as Normal or Hard Mode.
It's not. There's going to be a Storymode (Normal), a Tier 1 Hardmode, a Tier 2 Hardmode, and then Nightmare.
I'll see if I can find where I read that. I think it was a Q&A.