Transcription
The GM: *Makes a clearly overpowered monster, intending for the party to flee.*
The Party:
[Picture with the text "Hit him with your crossbow Steve!" overlaid, of a large octopus/squid-like creature with tentacles raised out of the ocean. It towers over a pair of humanoid figures, one holding a staff in one hand and pointing at the squid with the other, the other person aiming a crossbow at it.]
this is where dm'ing is much more about storytelling and less about direct mechanics.
for example, in this case I'd let them attack the kraken, only for them to realize as the crossbow bolt sails up towards the eye, then down, into the sea... "Your weapon doesn't have the range, for shit's sake, the arms are hundreds of feet long, it's much larger and further away than you assumed." Block out a disengagement - it grabs a few villagers and smashes some stuff (roll for athletics to dodge flying debris) and is gone leaving a trail of slime and destruction to the sea before you know what's happened.
Now, when they follow the fucker to it's lair.... then it's on like donkey kong lol, stupidity can only survive so many attempts.