Games

I suppose part of the conversation is about a concept I call "difficulty pressure." (Maybe there's another term for it?) Essentially, how does the game's difficulty affect players' approach to optimizing builds in a game with them.

When a game is on the really difficult end of things, (and this goes for competitive multiplayer as well where the "difficulty" is that all other players are optimizing and you need to be better than them to win) the game pressures you to optimize your playstyle in order to just survive and overcome otherwise insurmountable odds. In this extreme environment, there sub-optimal builds get pushed out even if they seem fun because you will very likely fail with them. Thus limiting build diversity.

At the lower end of difficulty, the game might be so trivial that ANYTHING works, but it won't feel satisfying because nothing you do really matters. You probably don't even need a real build at that point, so that feeling of making something crazy that trivializes otherwise challenging content isn't there. There's just no reference point to appreciate how good your build is. If every enemy had 1 HP, without damage numbers, how would you even know how much damage you were doing? A build that did one damage would be the same as a build that did a trillion damage.

Like you said, ideally there's some good balance state where things are challenging enough to serve as a yard stick, but there are still a lot of builds that can reach that point. There's a boring way to achieve this easily: No builds. Or at least no difference between builds. Everything does the same thing but maybe the colors are swapped around. Obviously that's not really what we want out of an ARPG, otherwise we'd just play a pure action game. So builds have to be different enough to allow for very different experiences, but not so much so that some are essentially invalid. But that's a much more complicated problem. With so many pieces and combinations, it's virtually impossible to balance faster than the internet hive mind can optimize.

There's another boring way to achieve this: Not on the player side, but on the encounter side. Because a very wide variety of playstyles need to be able to complete the content in a roughly equivalent way, the challenges need to be relatively interchangeable because you don't know exactly what tools the player will have access to. So you flatten the content so there aren't sharp edges that will make some builds unable to beat it. Alternatively you can require the players to have a specific set of tools no matter the build so that they can deal with all these scenarios. For example, in Noita, you pretty much always need:

1. A primary damage dealing wand that can reliably kill things safely and which won't run out of limited charge spells.
2. A digging wand to access various pickups and other areas.
3. A mobility wand to be able to get around the more sprawling and dangerous levels as well as get up to places you otherwise couldn't.
4. Late game, a healing wand.
5. There are some enemies that are straight up just immune to some damage types.

You have 4 wand slots and you will usually need at least one empty wand slot to be able pick up new wands in a level unless you can meet some other specific conditions. So all the slots you can use to make your build are spoken for. This limits what you can build a lot. Late game you can combine some of these effects into a single wand, but until then you have that restriction.

If the game didn't have this variety of challenges, you'd be more free to choose what you want out of your build, but then the actual content would be way less interesting.

This is the core tension. Content asks things of you and your build is the answer to that. The more difficult or specific the challenge, the less freedom you have to make different builds. The more generic or easy the challenge, the less your build matters, meaning you have more freedom but it's less satisfying to act on that freedom.

EDIT: I forgot to discuss the action/skill axis: Some games, despite having builds and being mechanically difficulty, can be entirely overcome with skill. People do challenge runs of Dark Souls at SL1 with a broken straight sword and no armor because fundamentally, nothing in the game requires you to take damage or kill things at a certain speed. So you technically don't need a build. Skill is essentially all that matters. If you just avoid things forever it doesn't matter how little health you have or how long it takes you to kill something. Any build stuff you do on top of that is just for the fantasy and to make things go faster. (Although fantasy wise I think the souls games kind of do a terrible job. All the flashiest weapon skills and spells are way too slow and impractical to be useful. They're not just suboptimal, some of them will actively make the game harder than if you were using nothing at all.

I guess my point isn't that it's impossible to make a game that has elements of both. It's that they are inherently antagonistic, not synergistic concepts. The more builds matter, the less content does and visa versa.