To be fair, that's how it is every time a reasonably strong character gets hit with a full counter. Of all the gazillion times we've seen it, only the nameless small fry actually get more than a little hurt when they eat their own attacks. I don't know why that is; but it is.
Depends when you stopped reading. Natsu has, of course, gotten several explicit powerups over the past few years. His most recent one is of a similar multiplier to Luffy's timeskip. For example, Blue Note is a legit teambreaker to Natsu before the first FT timeskip. Blue Note is capable of holding his own against Gildarts at the time, who Natsu can barely even make take a step back (with Natsu going all out and Gildarts holding back just to test him).If Meliodas takes on Natsu, which he should be capable of doing with his recent powerup barring Natsu having gotten way stronger over the years
After the first timeskip, Natsu is able to push Gildarts back a considerable distance with just one move.
After the second timeskip, Natsu one-shots Blue Note while carrying a teammate and making a joke. And this is just his base form. He also has several modes that dramatically amp his stats and newly unlocked demon powers which allowed him to blitz someone who had just blitzed his base form. So... yeah.
As for the fight, I see it splitting up with Luffy-Meliodas/Natsu-Escanor at the bell, simple because Luffy and Mel won't want to be standing anywhere near the other two.