Knowing that everything is gone after a death changes the way you play. You don't always sell everything you don't need right away, but you save the best items just in case.
Temreki from Guns, Nerds and Steel played with "Delete everything on death" in his Underground Bunker series, and he got into the habit of keeping some spare equipment on hand.
I don't play with "Delete everything on death", but I always have spare equipment in my base in case my backpack gets lost due to a bug. I also always have enough resources to make new equipment. It may not be as good as the lost gear, but if it keeps me alive until I find something better, it's good enough for me.