Stealth works, killing enemies with silenced weapons or knives doesn't start combat unless the other enemies/camera noticed the body. Are you sure you're talking about cyberpunk?

Just did some testing in case i was mistaken, unless the silenced weapon/throwing knife is an instant kill enemies get alerted no matter what, maybe this is just strictly an early game issue but the fact is the enemy you shoot will notice you no matter how quick you get back into cover. This makes me assume i pretty much have to "take-down" only stealth until i can level my perks/weapons to a point where i can instakill, which makes it feel off-putting.

They don't get instantly alerted, you have a window until the guy you were shooting at spots you, and if you kill him before he does it won't alert the enemies. Not sure how stealth scales with difficulty though