Alright I found that using this option(Easy Kills) bugs a quest in the game, only one quest I've found so far. The quest titled "The Legendary Forge of Caraldthas" has a task to 'Neutralize the Deadwalker smith' which will become bugged and prevent you from progressing the main quest line.
I suggest turning off the option(Easy Kills) before seeing this boss for this quest otherwise the boss becomes unkillable preventing you from moving forward. I made a mistake of not saving it before hand and had to restart the game.
I hope this helps anyone out there.
Just finished the game a second time getting all the achievements. There is also another point in the game where turning off option 3 would be required, well if you plan to do the quests. It's a side quest involving saving of Randval. If you want to do the two achievements associated with him, you will need to make sure you turn off option 3 before reaching his quest area. Or if you don't know where that is turn it off until you find and save him.
[Edited by Noodles, 5/14/2014 12:10:46 AM]
[Edited by Noodles, 5/30/2014 9:06:52 AM]
Solution, without starting the whole game over, DO NOT go into Caraldthas with option 3 on when going to fight the Blacksmith. You can use every option but option 3 on the trainer until after you defeat the blacksmith. I used the pyromancy to quickly dispatch the foes. Hope this clears up some things.
[Edited by grayfox230, 11/3/2017 8:03:06 PM]