“People say you don't know what you've got until it's gone. Truth is, you knew what you had, you just never thought you'd lose it.
I know it's probably too early to say without testing so bear with me but as a concept in my opinion the current solution is lacking.
my insight:
As I said, currently I feel like death is missing significance.
From what I understand so far, the punishment for dying is a partial lose of your currency and assets.
So basically the principle is just to make your purse suffer.
I suggest having a chance to drop item\s on death should apply as a standard to everyone and not only when corrupt.
Meaning dying to a corrupt player, you as a non-combatant also have a chance to drop an item.
As a balancing act you will be able to reduce the drop % or completely prevent it by buying an expensive or crafting a rare one time use item e.g. "amulet of losses".
All at the same time this preserves the current principle (by spending money\time for this item), grants additional control to your choices (by having applicable option for "being careful") and makes battles and duels more exciting by encouraging you to play better.
Maybe to keep it fair, while corrupt you could not equip\take advantage of such item (or could you?

)
Bottom line, Imagine how emotional attachment to a legendary item makes it truly legendary and adds a deeper sensation of meaning that goes along with the vision behind a game like Ashes. I find it essential.
*Addressing a possible concern, this will not apply during a siege or a war to not disrupt the balance and focus too much.
Also, how do you feel about having it the same way for PVE?
Imagine walking deep into a dark cave when you suddenly encounter a dragon sniffing the crispy corpse of a lone traveler, after slaying the beast you find out while looting his backpack he was clearly not prepared since he dropped his common boots when obviously you don't fight a dragon without a pair of legendary fire-walkers. Haha what a noob right?
From the other hand it also gives purpose to preparation by having you consider should you pull out from the stash your super rare legendary maximus prime armor for this epic challenging quest and risk it for the biscuit?
This kind of stuff make the difference for me.
Let's have a discussion shall we?
Edit:
ALRIGHT IM CONVINCED ABOUT PVP YOU CAREBEARS CHILL ʕ•ᴥ•ʔ
Lets talk PvE now ok? Please.