My view on this is that I don't believe this is the right approach to generate more RP (If that is the intention), in fact.. I view it as having the opposite effect. Reasoning being that when a player goes into a dungeon, they have potential risk, risk and death creates story, it creates in-depth arcing, in my view. Not only that but also it kind of doesn't make sense for Perfidus, Blackwatch and other high risk/high end dungeons to have Kobold Barovian loot... which economy RP is it's own monster and Roleplay as well.
Less Risk = Less in depth RP, less consequence and or punishment for said dungeon (Due to how low spawn and the lack of treasure). I am not really the type to always want to stand around doing /casual/ rp, like washing hands, cooking, basic food.. Sure I can do that, but do I want to? Feel free to tell me a D&D campaign you've ever played where you emote those things and or participate in mundane simplistic RP all day and aren't going into dungeons, risking it all and or delving into an actual plot that /shapes/ your character.
Sure, it may prevent people from power gaming in a sense of going and just stomping dungeons constantly but from my knowledge, the high level dungeons are already being somewhat farmed by people, be that beguilers or High level groups that seem to gate keep others from doing them as well. This is my own experience though and it will not or may not be the same as everyone else. I have played NwN for 20 years nearly and I can tell you what i've seen on other servers and sure I may be new to POTM but, the nerf just creates more issues than fixes from what i've seen. I have stood around more in the last week i have played with not much to do or not much of /worth/ to do other than casual simple RP encounters that do not add any depth to my char. Other than the Risk at the Mist Dragon, which that generated good RP but it also drops threads, so a good reason to go.
People should RP because they /want/ to RP not because they feel forced to, when forced to due to things being nerfed this way or even having a red cap, I feel it creates a less genuine approach to it and stories of a character in general.
Then there is the circular logic or issues of.. Ok so, say I am red capped.. I want to not participate in just casual rp that doesn't delve into plot but mainly consists of standing around doing nothing, just small talk right so I go do a dungeon, not for xp but for loot and the fun of it as well as RP that is potentially coming from the risk factor and economical factor of the server, so I go do it... spawns low, loots bad. no RP to really be gained because "It isn't worth it".. so I make a new toon, to bypass the red cap.. ok well now I am getting into another issue of "Cross story" RP..
Yes?
So this is my view and how it creates more issues than solving any problems. I give my view because I /love/ the server so far and I do not want it dying and or becoming less than what it was when I started, which yes.. again, new to the server, not to NwN. Just my 2 cents.