Tone curve 1 looks much over-done to me, I would start with the Neutral profile and go step by step. The photo is OK, only a handful of pixels are overexposed.
The Auto-Matched Tone Curve tool is using the embedded jpeg preview image, this can not work with the in-camera edited and stylized shots like this, I suppose.
Question: What the difference between highlight compression in the exposure, the highlights in the shadows/highlights and highlights of the residual image from the wavelet?
I have looked at the rawpedia and I have not found something that compare them and when I should be using one vs the other.
Exposure and highlight compression happen much earlier in the processing pipeline, making it the more important tool. It determines the handling of the highlights at[1] demosaicing.
I think the color and the brightness of the blanket is distracting and it should be desaturated and darkend. Here done with the “color zones” module in darktable. But I am sure this can also be done in RawTherapee (but not by me ).