Question in title. Went and tried the Shadow Dragon and it turned out to be almost a bit more than my party could chew. I am running as a Cavalier with Minsc, Jaheira, Anomen, Nalia, and Aerie and decided to take it on during Chapter 2(highest character level of 10) earlier on. Long story short Minsc and Anomen fell during battle and when I managed to kill the Shadow Dragon(by the skin of my teeth) thanks to Nalia and Aerie's magical attacks, lower resistance, breach, and a copious amount of wand power. Aerie had the raise dead spell so I was able to raise them back on the spot after the battle but I'm not sure I want them to lose out on the XP(if it even matters).

Dead characters don't gain xp, but don't worry about it in this case. The bit of xp they missed out on is miniscule compared to what'll be handed out like candy later in the game.