This has a bad tendency to backfire badly. Really badly.
A lot of players like to do “save summing” (save often and reload if it doesn’t go well). With doing this, the game only moves forward when you are winning, so the game gets harder and harder since it thinks you are really “good” at the game. It ends up making players quit in frustration from the gaming being too hard and “unfair”.
This was a huge issue for (mostly PC) players of the original Max Paine, since people weren’t aware of this auto adjusting difficulty.
Resident Evil didn’t have this issue because of limited saves (and when you died, it would offer to load the save for you, so it could monitor your death count.)