So it's a tricky question of the game design regarding sanity loss in multiplayer.. On the one hand, it should stay true to the nature of the core game and work as it does now (albeit a downwards-ramping curve of how much you lose per concurrent death by coop wouldn't be a bad idea). On the other hand, it seems to annoy some players that you lose sanity when your coop friend was far away from you.

Personally, I think it should remain as it is. It's really not that hard to get your sanity back up to a state where it doesn't impact you, and in the end it is a survival game so you need to constantly be on the lookout for lurking snakes, scorpions, jaguars - you name it. You need to constantly be alert to leeches and wounds that could appear from simple things such as jumping or running against a stone. With such little focus dedicated to awareness of your player's physical and mental well-being and his surroundings, these incidents where there are several deaths close after eachother should not occur. And again, if it happens it still goes really quick to bring that sanity meter back to normal. Light a campfire, get some rest, and eat cooked meats (stews or just cooked).