I don't have the energy to go into it right now with my typical depth. You must be new-ish to not have run into any of my, I guess years, of critique, complaint, and suggestions regarding combat balance.Are you referring to PVP, PVE, or both?
Also genuine question... can you link to any suggestions on how combat could be better balanced, preferably also with details of how it's unbalanced right now?
In a nutshell though:
1) Engineering is currently a giant cliff of vertical progression, yet exists in an open multiplayer world. This leads to myriad issues when it comes to making PvE content an appropriate difficulty level, obvious issues in any sort of PvP combat, and further issues still with the feel of progression.
2) The amount of defense afforded by engineering vastly outstrips the amount of defense afforded by same.
3) Shields are ridiculously powerful by design due to their generally impenetrable nature, and when you consider #2, engineered ships turn into absolute bullet sponges.
4) And finally, the core problem that 1-3 amplify to an obscene degree: defense modules fit into regular internal slots and utility mounts, and can just be piled on to your heart's content. I'm talking about shield boosters, shield cell banks, (the two biggest offenders), hull reinforcement packages, and module reinforcement packages. Having modules that are effectively just [MORE HEALTH] compete for space with modules that allow you to engage with various game systems is just not a good idea in a game like this. Balancing of PvE difficulty becomes a mess, PvP combat balance between a ganker and a ship that's fit to play the rest of the game completely goes out the window (and as such, so does the likelihood of organic, exciting PvP while going about your business), and making any sort of interesting combat-related modules that aren't health (or any interesting combat mechanics that use new modules) becomes a balance nightmare.
Basic suggestions:
1) Make shield boosters and shield cell banks sub-components of the shield generator, like how SRVs and SLFs are subcomponents of their respective hanger modules. Shield health is now a factor of the ship's base shield value and the size of the generator, instead of "how many SBs and SCBs can I cram in it?" Make hull and module reinforcement packages go in armor subcomponent slots as well. Give each ship a number of armor subcomponent slots commensurate with how "tanky" its hull is supposed to be. As with shields, this removes how many internal slots a ship has as a factor determining how durable it is. You can now have ships that have a lot of internal slots not automatically be super tanky in fights, and at the same time, you can have good combat ships with very limited internal slot space. Like magic, FDev can now balance combat ability and utility independently again, instead of them being so intrinsically linked as they are now.
-Alternatively-
For a simpler approach, give all slots a number of military slots commensurate with how "tanky" FDev wants them to be in a fight. All ships will have some, but combat focused ships will have more. Allow defense internals to ONLY be able to be mounted in these military slots, freeing up standard internals for everything else. Shield boosters would still need to be made shield subcomponents (or significantly changed in some other way) though, since otherwise "how many shield boosters can I cram on it" will remain an enormous factor on tankiness.
2) Rebalance engineering to actually be a give and take, rather than a massive direct upgrade. It should be about specialization and alternatives, rather than just getting wildly stronger. Choosing to keep a module vanilla should be a valid "generalist" choice, or at least be relatively close to being on par with engineered gear. G5 stuff should be extremely specialized, with considerable drawbacks. G1-4 should all be valid choices to stop at (giving you a spectrum of specialization), rather than annoying and expensive stepping stones to get to "the good stuff". This would put engineered and vanilla ships in at least the same ballpark when it comes overall combat power, making combat balance (both PvE and PvP), you know, actually possible. Opens up the possibility for interesting organic encounters with other players, allows FDev to make some PvE content hard without making them outright impossible for vanilla ship (or needing to resort to an entirely separate set of modules and sub-game, ala anti-thargoid stuff), and makes engineering overall an optional thing you can do to make a ship really "yours", rather than this massive to-do list that you're presented with any time you get a new ship / want to experiment with different builds, etc.
This by no means touches on all the issues or includes all-comprehensive suggestions for solutions, but it should at least get you an idea.