https://keithburgun.net/outside-dungeon-town-integrating-the-three-places-in-videogames/
Videogames, at least the kind I’m talking about (RPGs, adventure kinds of somewhat narrative videogames, Zelda games, Elden Ring, etc), have essentially three “places”: Outside &#…
Basically we need a game which doesn't break the fouth wall when it comes to areas and instead the player figures out in-game what an area is from NPCs, Enemies or descriptions in papers or books. That's one part that is easier to implement.
The interesting bit is blurring lines between town, dungeon, and outside. I think The Witcher series; even though it announces the places and the bounderies are more sharp, kind of allows danger to seep in to the safe parts too.
The Witcher example is interesting, I definitely remember combat in towns in the earlier games, but can't recall in Witcher 3