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In a metaphor for real life, it reminds you that it's all about enjoying the journey & not the destination ;^)
https://www.youtube.com/watch?v=czQmk_XMMMM
If you die on the coast then often you will not spawn far from where you died. Making it possible to get back to your body and loot it, should you die on the coast.
So yes you loose everything on the character that died but not any loot you may have stashed.
Of course stashed loot can be robbed.....or camped.