I think there may be a fundamental game flaw that is developing here. With other games that I know involve perma-death, it is frankly the player's fault for dying. They may have wandered into an area with monsters that were too powerful for them, or were too careless for a jump over a spiked pit. A common saying for perma-death games is "Yet another stupid death", or yasd for short. Most of the time the progress lost is nothing too major, as death is a common rule of the game that you live by. Another instance I've seen implemented is that it's simply hard to die as a more developed character. This is what I initially thought of H&H's death system. As you can guard your hhp carefully, it's easy not to die from stupid mistakes, and you won't lose all your progress. If you do however lose your progress, you could lose anywhere from a hour, to months or more of playing the character. The problem becomes apparent when you combine the fact that it's easy for a character to lose lots of play time with the fact that it's getting easier and easier for a player to die through no fault of their own. In this instance he was simply around his own place minding his own business, when someone killed him, for what appears to be mostly for kicks. This simply doesn't go well with perma-death, for obvious reasons. You may just say then have your tradition/change slider be at tradition. Frankly this is hard to do, by moving other sliders you can quickly end up with full change without wanting it, and to keep it at anything but full change you have to spend twice the time to change other beliefs. There also comes into play that at full tradition, you level up one tenth of full change, which makes any time spent playing much less worthy, though it's necessary if you don't want to risk being randomly killed for little reason.
tl;dr version: Perma-death isn't good for games that take massive amount of time to be invested in it, and have little control if someone else overpowers you, or simply catches you off guard minding your own business.