Finally got on to Test this morning and died a few times to see what would happen. Really, the change is not, mechanically, particularly major. You die, you leave a tombstone-shaped essence at the spot where you died. From there your options (from what I've seen so far) are either to go recover the "essence" and the debt associated with it, or to bite that loss and move on.
Since nothing is dropped on death, the only thing that happens right now if you don't recover your essence is that you don't recover lost xp. The weirdest part of the whole experience was respawning with gear on, which hadn't been the case for... a while now.
It's not the end of the world. If it makes it to live in its current state, most people won't see much of a difference. CS on the other hand won't have the nightmare of trying to find missing tombstones and recovering people's lost items. (I'm not debating whether this is the "right" fix -- but clearly it will be "a" fix, which might be of urgent importance to Sigil right now.)
Having tried it, I can see why they'd like to implement it. How good a solution it is to various issues, and what it might mean in terms of "challenge" and all manner of other side-issues (for example soulbinding gear) is a whole nother kettle of fish -- but, arguably, not one that a death mechanic should have to deal with directly.
(That being said, those *are* issues I'd like to see addressed, someday, somewhere.
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