Wow this was a fantastic read! It's always cool when the death mechanic has some sort of purpose, reason, or lore. It's also something that most players, I am definitely one, take for granted. Sometimes I walk around the real world hoping that there's some respawn mechanic (e.g. Groundhog Day) but what would probably be more interesting would be the lore rather than the mechanic behind the respawning.
I never thought about the Soul's game death mechanic but now it make sense to me with regard to all "respawned" creatures. Where in reality it's not the creatures' respawning, but the player respawning back into the same world.
Thanks for the great insight and read, @patrickklepek!