[quote=@Seirei No Hai]
<Snipped quote by ADamnFiddle>

Ohhhhhhh! I get it now!

So:

- The "players" from the other world still remember how one or more of them died. But the NPCs and OCs from this world can't.

- Interactions and connections made by the player to the NPC and OC from this world will be erased since the player that died will respawn in the same place at 10 AM.

Or that's how I see it anyway. Still unsure if I want to make a "player" character. I'll just stick to creating an Elf and/or an Oni.
[/quote]

I think that each character is a player, aside from the characters who are NPCs. At least from your instance. Unless that has changed to suit the situation. Think of your character as some sort of MMO character, if you have ever played an MMORPG. When your character dies, they "respawn" a few moments later, perhaps with a monetary reduction or a debuff. 

Or if you have ever played Demon Souls or Dark Souls 2, how when you die you lose health and resources until you defeat the area boss [Demon Souls] or consume a humanity [Dark Souls 2], but i  am not sure the method one needs to take in order to regain their former power. I think you nweed to defeat who defeated you, but that would kinda be awkward if a PC defeated you last lul.