I actually skipped that Headless fight because I found it so frustrating and not really a straight-up test of skill like most other fights. Unless your ego can't handle putting it off for now I'd recommend just coming back once you're more leveled up and have a few more items for dealing with terror. Or, tbh, just skip the fight totally because I'm pretty sure it's optional. Though I know some people can't skip an optional boss if they know it's there, so if that's the case, godspeed to you.

There's a boss coming up soon-ish for me that I was stuck on for days in my first playthrough, and who I considered second in difficulty only to the final boss. So I'm really hoping it's a breeze this time around. It's one of those bosses where other people online didn't seem to have nearly the trouble I did with it. Sekiro is weird like that, because on the flipside some fights that others found hard are ones that I beat first or second try on my first playthrough. I think it speaks to the wide variance in the way you can take on bosses in this game. After you beat the game you should check out the Wiki pages for some of the bosses you faced. You'll realize there are a bunch of unique boss-prosthetic interactions you wouldn't even have considered.

Anyways, I'm interested to see what you think of this boss that gave me so much hell when you encounter it (if you end up picking the game back up). I would say it's one of a few bosses in Sekiro that are actually almost Dark Souls-ish in the way you need to approach the fight.