It can get extremely messy in very busy fights and technically is very challenging. You've already listed two conditions: party health and boss attack intensity. Mixing the two can be frustrating and lead to inconsistent results with music that is quite bad to hear to if not directly confusing. There are cases where the music dynamically changes but they are based on distinct things like boss phases. Dynamic music is nothing new in terms of software development but as with everything, if you overdo it it can lead to a huge mess that will probably make people turn off music entirely.