Most games apply more severe penalties, often the loss of the character up until last save point, or completely in case of many archetypal survival games. You will lose experience when dying in Minecraft, and possibly your items. You will lose your current character in DayZ (and many similar games), and your stuff can be stolen by other players. Many survival roguelikes which share many similar features with Valheim simply delete your character, sometimes offering a chance to recoup the loss in some way, but not in full. Many older games will result in a total or soft game over after all lives are lost. And so on and so forth.

Loss of 5% of your current skill value is a meaningless penalty unless you die over and over or you die when you're highly experienced in one skill or more. There are some skills which are hurt by dying much more than others – magic skills for example, which are late game abilities for good reasons.

The biggest loss from dying occurs between ears, followed by general loss of progress and the backtracking efforts, followed by circumstantial losses like missing on an important enemy kill or perhaps a failed animal taming process. Skill progress loss comes very last in the chain.