Probably not intentional as the config mainly mentions it being for the player. If you were to visit an ocean monument for example, guardians would constantly take damage due to how fast they swim and that doesn't happen with this tweak disabled

It actually applies to any living entity but I can see that it rarely shows the intended effect for other mobs. Can think about limiting that to the player.

I'm not sure how the collision damage is handled, but if it's its own damage type, you can blacklist it for certain mobs using another mod such as RotM. It would be nice if limiting it to the player was a config option so you could still take advantage of the old implementation, or instead just implemented an entity whitelist/blacklist into Universal Tweaks itself.