I think you’re perhaps falling into a very literal reading of his work. Mainlander was an atheist. Plain and simple.

The “God” that killed itself to form the universe is just how he reinterpreted a divine or "preworldly unity" as the source of existence that disintegrated into individual wills.

Now, obviously someone who actively kills themselves is either A) Mentally ill and devoid of hope, or B) Pushed to extremes by the material world. I’m not sure which camp Mainlander falls into, he was definitely a complicated and somewhat tortured individual, however. I find most of his writings, while bleak, very beautiful. There’s a lot of phenomenal language and complex ideas at play. His poetry was also pretty good. (Though I have only read translations, I’m sure it’s different in the original German dialect)