So what is the solution then?
For example, if you had three nodes, each with every service and round robin service discovery to overload the system is just a matter of receiving a difficult request every third query. No matter how good your front end load balancing is in a micro service system, if your intra-service requests are not load balanced you can have problems with overloading one node, while others are idle.
Unless you're deploying a Smartstack-esque LB strategy, where each physical node hosts its own load balancer, then the details of what's deployed where are mostly irrelevant. You use your SD system to abstract away the physical dimension of the problem, and address logical clusters of service instances. And you rely on your scheduler to distribute service instances evenly among nodes.
If a service only say talks to instances of another service that is local, then every node in a cluster must contain ALL services. If the local service is overloaded but a remote service isn't then the service you are talking to will be slow, regardless of any front end load balancing.
Every service must be able to talk to every other service, because if it cannot then you cannot load balance or deploy without it being an n^2 problem. So the question is how to implement it WITHOUT complicating the services
Yes, every instance of every service needs to manage its communication paths to other services. That's N connections, rather than just 1 to the message bus. But this is a pretty well-understood problem. We have connection pools and circuit breakers and so on. And the risks are distributed, isolated, heterogeneous.