They certainly can; and while some nasty elements and places are "signposted" not all of them are, and if they get in over thier heads and don't quickly turn tail and run (for which there's almost always an opportunity) they're hosed.
This doesn't mesh somehow.
In-character, it only makes sense that the characters are going to - if given a choice - try to take on challenges they have reason to think they can handle, while leaving those they don't think they can handle to someone else.
I mean, if you're a 2nd-level party (any edition) and you've heard rumours about a band of Orcs raiding the highway, a band of Giants marauding in the mountains, and an ancient Lich stirring again in her tower - and assuming your party has a collective wisdom higher than that of a gas tank - which of those missions are you gonna take on?
That decision has nothing whatsoever to do with available xp or any other meta-concerns; it's an in-character decision based on what the characters think they can handle...and if they do decide to go after the Giants or the Lich then so be it; and we'll remember those characters fondly provided they've named us in their wills.