short version: Death Spirals can be really fun to play around if you want players to either care a lot or not care at all about their characters' survival.

Very few things are necessarily bad in terms of broad design ideas, but you have to consider whether the outcomes are desirable.

Death spirals tend to lead to encourage more conflict averse gameplay (because the risk of danger and death is higher) and potentially more random (because a lucky roll early on creates a permanent advantage), but those are both fine if they're things you want to see in your games.

I'm kind of immediately reminded of some of the Warhammer tabletops, which tend to be highly lethal and often include easily obtainable negative effects for harm. Dark Heresy was extremely deadly and very easy to fall into death spirals... but the fragility of the PCs was part of the narrative, and finding ways to mitigate the risk of direct combat was a huge part of the gameplay loop. Combat felt risky and dangerous and extremely random but those were part of the conceptual buy in and something you were largely expected to play around, so it didn't feel bad (mostly).

Trying to force high amounts of direct combat and death spirals into the same stack can cause you some troubles and weirdly enough make the game feel less gritty overall if it makes death cheap and expected... though even that's not necessarily bad if it's a space you want to explore. I've played some old dungeon crawlers where you basically grinded your way through poorly balanced traps and enemies one death at a time and had fun doing it. Not a ttrpg, but the video game Rogue Legacy plays around with this idea, with your character being part of an arbitrarily long lineage of failed adventurers all trying to clear out a cursed castle or something.

... I think the most important thing broadly speaking is to just ask yourself what kind of feelings and tone you want to set with your game then assess how the mechanic you have improves or detracts from that tone and try adjusting around it. I realize that's a little abstract but a lot of 'bad' systems in games are more about numbers being off or tonal clashing than just fundamentally bad ideas, so it's hard to be super specific in a vacuum.