This inspires me for a new death mechanic proposal! On death, the player relinquishes all possessions, properties and wealth. Their character is then deleted, and access to boundless servers blocked for eternity. Thanks for playing the game of life! On the plus side, your equipment takes no durability loss!
Jokes aside, I’m sure you understand the reason for a death penalty to include things like durability loss? With the players ability to return to their place of death after respawn, almost no creature can pose a true threat to the player! If at least your gear can be lost, then you should have some motivation to avoid dying as best as you can.
Are you taking measures to avoid death? Packing healing brews and cooked meat, using your grapple hook to safely descend heights, and arming yourself with a slingbow should be ample preparation to explore even the most hostile environment in relative safety. There are few things that will outright kill a player, and all of them can be avoided or defeated with even a little effort.
If all else fails, stick to a friend. It’s dangerous to go alone!