Producer Yosuke Uda explains this in a developer blog and also says the game’s atmosphere is a high tension scenario. From the beginning of the game, players are thrown into a hopeless situation. Tale of the Last Promise focuses on a war between magic kingdom of Yggdra and armored Savi Shantie soldiers. Being surrounded by enemies gives players the feeling of a no escape situation.
To keep the tension flowing during gameplay, Uda realized the scariest thing about an RPG is losing everything, which is why Tale of the Last Promise has a permadeath system.