Do you lose all your stats again? because that kind of driving me crazy. Not a real fan of that game design choice

Yes, you start over again.

Thanks for the replay. I will wait for a sell to happen first

I imagine their reasoning has something to do with trying to avoid having to make every encounter have to be over the top "unrealistic" in order to challenge the player.

Avoiding a situation like, "I just beat the king of the titans (Titan Quest)!" then having the expansion be all "yet the dinkiest skeleton turns me into a puddle of goo...".