Reproduce:

1. Start Chapter 10 of KotFE in Veteran mode:

2. Get until the fight with the two Overwatch Hunters in Bugtown

3. In the phase, change difficulty from veteran to story

4. The phase will be reset and you will be taken back to the start point

5. Observe that the Quest Description shows Story as the 'currently selected difficulty level' when hovering over the Story button/label

6. Go into the phase area and experience that the fight with the Overwatch Hunters is just as tough as in veteran mode

7. Reset Chapter 10 to start in Story mode

8. Get until the fight with the two Overwatch Hunters in Bugtown and experience that it's easy.

Expected result of change from veteran to story difficulty: fight with the Overwatch Hunters should become much easier as the quest description indicates that you are in Story difficulty