Hang on a minute. You thought losing HALF OF YOUR META PROGRESSION (Hizi's levels) and Catzilla returning "Stronger" was "recoverable?!"
Level 55 -> 27 is OVER THREE HUNDRED THOUSAND (300,000) XP LOST TO A RANDOM BOSS. A boss which you CAN BARELY PREPARE FOR. I mean, you know its coming but your prep time is completely rng dependent.
I say this with the most amount of respect I can muster. You HAVE to be a masochist... There is no other explanation as to how you find something like THAT "recoverable." Because in ANY other game THAT is game ending. Better off starting from scratch. THAT is equivalent to your 4 best soldiers dying in XCOM and you losing everything they had equipped to them (your best gear).
I mean, it's not entirely "random" as it shows up when you hit level ~50, so when you hit level ~50 you KNOW it's going to pop up. But whatever fight it takes over IS completely random. 3 tanks? You're fucked because everyone's bleeding now. 3 drainers? Manageable. 3 Healers? Manageable. God forbid you get ANY fight with a tank or tinkerer in it because starting the Catzilla fight with bleeding AND a 50% heal reduction is a guaranteed loss. Not to mention in its second stance the Head removes one of your characters until the stance ends IN ADDITION to draining A PERCENTAGE of their xp. You can technically free whatever character it steals if you damage it, but oh wait. You can't! Because BOTH of the Hands are taunting and have about 2K health... My Red was level 62 and she was losing over 8000 xp a round. Enough to level up ALL of Catzilla's parts INSTANTLY. Not to mention IT FUCKING HEALS ALL THE PARTS FROM IT TOO. The fuck am I supposed to do to that? I can kill the tail the next time it cycles back to the first stance, but by then each part is over level 60, and all of my characters are bleeding, crippled, burning, and half health. Meaning I have to choose between mending, defending, or taunting. All of which are almost guaranteed to do nothing to help fend off my impending demise.
You SHOULD be mad at this fight by the way. In my opinion this is the epitome of bad design. It's not difficult in any way that actually matters. Nor does it have any unique mechanics other than the dual stances. It's just "difficult" for the sake of being difficult. The tail and hands all have about 2K health, the head has roughly 3K AND drains AND applies the stolen xp to EVERY SINGLE PART (meanwhile your drain doesn't do the same, despite it making sense for it to do so. I mean it's technically a SINGLE entity. If it copies the stolen xp and gives it to each part, then each part should LOSE any xp drained by me. I shouldn't GAIN that xp as it'd mean quadrupling the xp I get from draining it and making it the best farmable enemy in the game, but the parts should still lose it.) AND heals every single part for HUNDREDS of health EACH TIME IT DRAINS YOU, the tail also applies AOE burns to your whole party, and heavy hitting single target burns as well, one hand applies burn (because there isn't enough in the fight as is), and the other applies bleed (yippee), the legs have roughly 3 - 4K hp as well and deals about 350 damage a hit.
It's a fight basically meant to fuck you and put you back to the start of the game. If the dev's intentions were a "Mr. X" type of impossible fight it could've been done WAY better than this. As it stands, the Catzilla fight isn't "recoverable" because that would imply it doesn't click the "reset timeline" button FOR you. Taking away HALF of Hizi's levels is way too harsh of a punishment for losing what might be a quite literally impossible fight. Not to mention its horrible balancing.