Is that such a bad thing, though? I mean... it teaches a player that they really should get geared instead of coasting along with terrible gear that's barely high enough to get into the instance in the first place. Then, later on, during oh, I dunno, Ravana or something you don't see people showing up in bare minimums making everybody's life hell.

Yes, it's abnormal and it could even be a bug, but I would posit that a transition AoE doing 60% of your health in damage is... something that is commonplace later on in the game and it's something that should be gotten used to. You have all the tools you need to get through that, and it's not going to wipe a group unless the entire group is wearing bare minimum to get in, which shouldn't really be a thing in the first place.

In fact, I always thought Memento Moogle was just too weak anyhow.