After returning to my game on hard mode, I noticed that it was suddenly much easier. I didn't realise until it was too late that the game had switched the difficulty to medium. Appearently this is a known bug, where selecting continue instead of load game from the main menu might reset the difficulty.

Is there a way to confirm this bug in-game? When I look at the save files, they don't indicate the difficulty.

That is a weird bug. But can it be fixed?

I'm not sure if GOG can fix it, but there aren't workarounds we (the players) can use to fix it ourselves so far. I think I have a clue about why this happen but I'm not sure if it can be fixed by us and if it does it would involve hex editing the file, something players might find unacceptable. This bug is present in all the available versions of the game: Steam, GOG, Origin and even the PC DVD version.

There has been a "solution" available to fix this problem since it was originally released on PC DVD, but it actually fixes nothing.

The proposed "solution" requires you to hex edit the save file and change some stuff, then when loading the game will show your savegame with the right difficulty, but that's just a visual thing because as soon as you load the game you will be playing with medium difficult and you can notice it because of how easy the necromorphs die compared to when you were playing it in hard, also when you save the game (even if it is right after you load the "fixed" save) it will be saved as "medium" difficult, regardless that your fixed file said hard.

I wasn't even aware of this bug until a few days ago, because in hard I struggled to survive and usually not had ammo, but from some part of the game I realized I had a lot of ammo, health packs and couldn't fit anything more in my inventory and it was odd to have surplus of things when the enemies are tougher, then I noticed the "medium" thing in the savegame.

EDIT: One thing I forgot to say is that just like @gaspop said, using the "continue game" option might reset the difficulty, so it is not that using "continue game" has a 100% success of triggering the bug. But usually when you notice you are affected it's too late.

Another thing I noticed just now I uploaded the screenshot is that the time of the 4th save is way off... it would appear it is a different playthrough but I'm not sure how that happened (because I have played from the beginning just once and in hard), perhaps when the difficult was reset the timer went to zero. Either that or I'm awesome and finished the whole chapter 1 in ten minutes, which I'm not sure is even possible because there are several dialogs/cutscenes with your crew and those cannot be skipped.

Thanks for letting me know about this. I was able to avoid a lot of frustration.

So it's been awhile since this post was made, but I wanted to let anyone who comes looking for a fix that there is one. Downloading a Hex editor to manually edit the save files does not work. Use Cheat Engine to change your save difficulty while playing.

Launch Cheat Engine, then Dead Space, and select Dead Space as the process that you want Cheat Engine to edit. Click "add address manually" at the bottom of this page, and enter "Dead Space.exe"+A8ADC0. This is the file address for the first save file in the list. If your save was set to medium, then it will have a value of 1. You can change this value to whatever difficulty you want: 0 = Easy, 1 = Medium, 2 = Hard, 3 = Impossible.

I don't know who might see this, but I just did this to fix my own save and can confirm that it works.