In Star Wars Galaxies, originally at least (don’t know if they ever actually went through with the idea) Jedi characters were supposed to have only three lives. Then your Jedi was officially dead. You could still “play” him as a ghost of the Force (you know, like Obi Wan after he gets a facefull of lightsaber) but those could only move around and talk, nothing else.
And then of course there are the various “Hard Core” servers of Diablo, Sacred and similar hack 'n slash games where you do have only one shot, I believe as a legacy from waaaay back when those games were called Angband or Rogue. You die for any reason, be it a mob, a player, a badly timed server disconnect, a stupid bug, your toon is gone, permanently. If you’re lucky you have a spare character you can race to the location before your loot despawns or goes into the pockets of someone else so you at least haven’t lost everything. If you’re not, well, thanks for playing. Enjoy the trip back from square one.
But these are all voluntary, mind you - each of these games also have “normal” servers where death is just, well, regular death. Lose XP, maybe some gold and get your items damaged, get right back in the game.
And no, I do not get people who play on Hard Core servers. I mean, I get the bragging rights aspect of it and the cheap thrills but fuck me. Looks too much like self-mutilation to me, know what I mean ?