I took my Warlock with ~30 is phys resist into normal Lagon kept on getting splatted by the claw hit, after a few deaths the Lagon quest echo went grey & I had to do another normal mono to get enough stability.
This still happens, you may wish to try dieing a few times.
I just tried it on the Reign of Dragons empowered mono, died 10 times in a row to the Emperor and the stability didn’t change. So maybe this is only for the normal monos?
Yes, I agree. And it makes me build better, work harder on my skills and character instead of avoiding content like the plague as I did in PoE where I avoided everything remotely fun to avoid XP loss.
XP loss on death is one of the worst ideas for an ARPG.