After completing Costume Quest's main story line, I just lost the very first fight of the Grubbins on Ice expansion. The enemies do an insane amount of damage, and it doesn't look like you can pick your costumes and Battle Stamps either.
However, after having been defeated, I got a little cutscene of my party being shoved off a cliff, and the game continued, so clearly the game expected me to lose. I didn't lose by a lot, though.
So, is it possible to win this first fight, and what happens if you do?