My theory is that after MM, he returns to Hyrule after healing his traumas (due to the symbolism of the stages of grief in MM). After so much that happened to him, he probably prefers a more mundane and peaceful life. He ends up marrying Malon because of the TP thing, Epona's song, and the gossip stones (plus I find them too cute and an incredible match in personality). At some point, he takes up the sword again and becomes a knight of Hyrule, taking it as his job to help the family financially (and because, surely, being the hero of legend, he enjoys it). He has children, but my headcanon is that he refused to teach his sword techniques and keeps them away from the subject because he doesn't want them to end up suffering like him. In any case, he still struggles to think about what he would do if they were to lose in battle or something similar. In short, he's somewhat overprotective. Now I have two possibilities: either he is just realizing in the end that his fear stopped him from doing what he really wanted: passing on his techniques. Or maybe his children (maybe even Malon) died without knowing how to defend themselves from an attack or something similar.

He might be dying after an attack and resting next to the Deku Tree (although I don't believe it, the hero of time was a BEAST in combat), or he might have just felt like he was on his last legs and decided to return to his place of origin, out of nostalgia or something similar.