It seems in every generated world, every NPC I come across does killing unarmed damage. Is this normal?
Depends on how much is “killing” here.
NPC melee should be player-tier, meaning it’s not the pitiful zombie damage. NPCs with spears, axes and katanas should still be more dangerous than unarmed, at least below ~7-8 lvl of the skill.
Plus, unarmed should generally suck at piercing armor.
Are the NPCs seemingly killing you in a single turn of combat (AKA stunlocking the player to death)?