Many people in this thread thinks death should have penalty, and the penalty means heavily punished by clearing inventory or losing all of the gear. However they ignored that the most direct impact of death is you lose your progression towards a goal, this goal can be killing a boss, exploring a dungeon or gathering a certain resource. You have to repeat the progress if you are dead and this is the penalty.
This game is advertising as a dynamic mmo with lots of interactions between skills and the environment. That means players need a lot of trial and errors in order to explore and find these interactions and this should be an enjoyable journey. But the heavy death penalty will definitely discourage players from exploring. New players may just copy and paste the meta builds from hardcore players and lose interest to the game quickly.
If we look at the successful MMO RPGs such as WOW, elderscrolls online, FF14 and guild wars 2, none of them applied such heavy death penalty. In the isometric MMO ARPG category path of exile is very successful but it does not take away all of the items in your inventory. It is true that these games do have other penalties such as losing experience and equipment decay, which may not be directly applied to Fractured.
Many full-loot MMO RPG failed to fit modern player base. The amazon new MMO new world ditched their original plan of full-loot pvp in the beginning of this year. The most successful full-loot MMO RPG I can think of is probably Albion, but that game is pvp-oriented and does not have the "dynamic" features in Fractured. We certainly do not want to see Fracture to become an Albion copy.
Anyway this game is still at early stage, I believe the developers will make the game towards the right direction based on player feedback and experience from other games.