Honestly the simplest answer is to simply create a toggle-able "epic hero" mode that gives you x many free deaths and just call it a day.

It's a trust. It doesn't impact the difficulty level for party play at all. Let the people who are only here for the MSQ enjoy the MSQ. It has no bearing on anyone else's enjoyment of the game if the experience designed for purely solo play is reduced to easy mode. You don't even need to remove gear rewards, no one's experience is being 'ruined' by people getting free 745 gear when we've had 750 gear available for what, 4 months for people collecting tomestones?

If you feel like your experience is being cheapened because people can just progress through an MSQ dungeon without 'gitting gud' then I don't know what to tell you. You're probably a joy at parties. I mean I have a surprise for you - you can get waxed several times 'for free' during duty support for the trial.