That's the border of the map. You can not progress any further past that point. And the penalty is pretty ridiculous as you've already discovered lol.
Navezgane has almost a square border, whereas if you play a RGW, the border is a circle. I thought maybe I needed hazmat clothes when I 1st encountered it, but nope, nothing will work. Even if you go to bedrock and dig, you will be killed virtually immediately. You can however, get close enough to break down cars/iron if it's on the border. Just be sure to carry med kits incase you get hit by it.
Also, if you do what I did in the past, I've rode right into it and died. Leaving my minibike stuck in the dead zone. The only way I was able to get it back was to equip med kits on my toolbar and spam use them to get to my bike.
If you're playing Navezgane, you can find maps online, just remember if the entire north is covered in snow, that's the newer map, which console doesn't have.
If you're using a Seed, keep an eye on your location. Around 3,000km or so from 0.0 is about where it ends. So if you're near that, constantly bring up your map to avoid it. Though usually, when you get close, the sky will become grey, it'll rain, and usually it's always wasteland. Be careful of towns when they do sit on the border, cause I've seen some (past 2 seeds I've played) where the corner of the town dipped into the deadzone.