Call me what you will, but the thing that bothers me about losing equipment is that it's a double punishment. It feels like kicking the player exclusively when they're already down.

I don't know about other people, but the only time I ever died was early on in a new biome in a rough spot. AKA, the points where the game is at its hardest. I never once died while just tooling around in a biome I'd already spent time in. So to lose your equipment, in the most dangerous spot you have access to, and then have to get it back in a much weaker state than you got killed in in the first place, just seems mean. I realize the game needs a penalty for death, but for the aforementioned reasons, losing all inventory seems like the wrong sort of punishment. Plenty of other games find different ways to punish death. Nobody would call the Dark Souls games casual mode baby time, (even if they really aren't as hard as they're made out to be,) but those games don't make you weaker for dying, they just take away the currency that advances you. Valheim would do much better with a system like that - something to lose so death matters, but not a loss that makes the player tackle the same problem that already killed them in an even weaker state than when they lost the first time.