the only time i've seen a similar mechanic implemented in a way i didn't hate was in Final Fantasy Origins
because 1) the levels are fairly linear so you'll most likely have to go back through that section eventually anyway, and 2) the thing you drop that you're in danger of losing permanently if you die without recovering it, isn't that hard to regain
you start every level with 2 bars of MP and slowly build it up to 6 bars by killing enemies. if you die, you go back down to 2 bars, and can recover the rest by reclaiming your soul in the spot where you died
(another important factor is that FFO is arranged in discrete levels. so you can in fact just go "alright this level sucks i'm gonna go do another one" and lose nothing, because you start every level with 2 bars of MP regardless)
and of course the worst implementations of this mechanic will have you die in a boss fight and then drop your body past where you get locked into the boss fight
because 1) the levels are fairly linear so you'll most likely have to go back through that section eventually anyway, and 2) the thing you drop that you're in danger of losing permanently if you die without recovering it, isn't that hard to regain