Thorfinn: As someone who has done a lot of modding, that's a really bad idea. It's already way too easy to make a mod too difficult, if that makes sense. You know the results of all the dialog paths. You know the strengths and weaknesses of the encounters. You know the search maps, so know the best route to approach the encounter. You know whether to charge, hang back, spread out, whatever, because you've chosen or even defined the AI.
I can't think of a single reason I'd like to be testing a mod without the kind of equipment you would expect someone to actually have at that time in the game. AROW01, absolutely. BOLT04, ok, but don't overdo it. SCRL09, there aren't many of those in the game. Unless your mod gave one away earlier, with some foreshadowing, probably shouldn't CLUA one in. Ctrl-J, fine, so long as you don't skip important things someone playing your mod will encounter.
It is, indeed, not a good idea to blatantly cheat if you are concerned about testing the combat balance of the mod.
However, such cheats can be useful if you want to make sure the scripting is correct. You might think you know the results of all the dialog paths, but perhaps you made a mistake in the script and something unintended happens.
It's worth noting that, when you are testing the scripting, you probably don't want to use Ctrl-J or outright skip chapters, as that may put the game into a state that wouldn't happen through actual gameplay. On the other hand, cheating killsw01 or playing on story mode will not affect scripts not relating to combat. (Also, cheating killsw01 will help you test the case where more damage was dealt to a creature than intended. Maybe an enemy is supposed to transform into a stronger form after losing a certain amount of HP, but you forgot to give the enemy a minimum HP item?)
In summary, testing combat balance and testing event scripting are two different things, and the sort of cheats that would be useful and which would be disruptive are different.