As someone who wants death to matter more, not less I guess it depends on how long the cool-down is. I would hope something this powerful would have a long cool-down.
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I would like to see the death system take a more interesting direction:
Like in fable when you "died" or "KO"ed you got a big scar every time, them more times the more hideous the scarring became....of course add very expensive scar removal fees and BAM! you got a way to sink a ton of gils out of the economy, a nice effective "I don't want to die" mechanism, that does not take forever to recover from, of course if you get a raise you don't take the scar etc.
I think it's far better than costing someone game progress or wasting time on some silly penalty.
Adds for some nice Role play options too,
"Damn Bob you look like you got beat with an ugly stick!"