The Silent Hill f difficulty options let you set the challenge for action and puzzles separately, with options like Story, Hard, and Lost in the Fog. It's all a bit of a muddle though, as it's not clear what the default is or what any of it changes, and it's hard to make a choice without knowing what's going on. However, the game does clarify things later, so let me explain what I've found out and what it all means.
Silent Hill f difficulties explained
Silent Hill f difficulties are separated into Action, which mainly covers combat, and Puzzles. Confusingly, the hard option is seen as the default for Puzzles, while for Action 'Story' is described as the 'traditional Silent Hill difficulty for story-focused players'. Obviously that's not super clear, and neither is the fact that the 'Lost in the Fog' hard mode is unlocked as default for Puzzles, but only available for Action when you've completed the game once.
What do Silent Hill f Puzzle difficulties mean?
Let's start with explaining Silent Hill f Puzzle difficulty, as that's the easiest up front. There are three options that are basically easy, default, and hard, confusingly named like this:
Easy - Story
Default - Hard
Hard - Lost in the Fog
You can get an example of this to some extent in the Silent Hill f locker codes puzzle, which features the clues for the harder options alongside the default difficulty. So while the 'hard' option features clues like converting 'bus' via an alphanumeric code to 805, the harder options has clues like 4151+3√6. The puzzle where you have to find the correct Silent Hill f ema, on the other hand, changes between finding three animals on Story/Easy and deciphering a slightly more complicated poem on Default/Hard.
Hard is basically the default option, in that puzzles will take a little bit of working out but aren't actually 'hard' hard, if you see what I mean.
What do Silent Hill Action difficulties mean?
The Silent Hill f Action difficulty is harder to explain, as it doesn't clarify anything at the start. There are also only two options to begin with, as the third isn't unlocked until you complete the game once. However, as you play tutorials appear to explain a few things and how your choice of difficulty affects combat. Specifically, this is how Silent Hill f Action difficulty changes things:
If you chose Story then you can recover both health and sanity at a Hokora (shrine) without using Faith (gained from trading in collectables). In other difficulties you'll need to use consumables to recover health and sanity.
Max sanity will not decrease if you're attacked while using Focus in Story mode to deal extra damage. In other difficulties, max sanity will be decreased if you're attacked while using Focus.
Being grabbed in Story mode will not decrease your max sanity, but it will in other difficulties.
So Story mode basically protects your Sanity, which can be depleted by events, monsters, and actions in the world - making it harder to lose and easier to replenish. In Hard you'll lose it more easily and find it harder to restore, and when Sanity is depleted you'll start to take Health damage instead.
Once you've finished the game you'll then unlock a further harder Action difficulty called Lost in the Fog, like the Puzzle option, which is harder still.
From my experience playing it and that of Oscar Taylor-Kent who did our Silent Hill f review, the default options of Action/Story and Puzzles/Hard seem to be absolutely fine and provides the perfect amount of challenge for a traditional playthrough. It's worth noting that you're also locked into a single Silent Hill f ending option the first time you play it, so you won't get any extra benefit for your first playthrough if you chose to make things harder.
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