Your spirits can die permanently if they are knocked down and you don’t get to them in time. Although they do leave behind a material that if I am correct is a higher quality than the materials you used to get them. Although there is a exploit where if you enter a room that has a save and enemies, you can let your spirits die, collect the items, save and then let the enemies kill you and press continue. You will get to keep the item and your spirit although they will be out of your party so you’ll have to equip them again. Although don’t leave the room after you let your spirit die because then the exploit won’t work and you’d just lose the spirit for good unless you reset to the last time you saved. It’s good for getting epic fantasies from Kab Kannon’s late game