All players have a streamline mentality regardless of what you do... even if you intended the death penalty to bond more closely to your character's group, you'll in cause increase the segregation of elite players not wanting to pick fresh new players to their dungeon/primal run since 'wiping upon immediate failure' is no longer an option. Sure you can bring pots to the fight, but that in turn also spikes the price for said pots since there's a new demand for it, so more people will want to use the party set-up of whatever is already optimal to avoid those costs.

Even though you'd want this bonding with many players and what not, most people unfortunately just want to get shit done so they can sleep for work tomorrow, regardless of how 'hardcore' the intended content is.