Am I dumb? - Everhood 1 Question

How come Red/Pink can die?

Just finished Everhood 1, great game, love it. One question:

As the player, you fail an encounter by taking too many hits and exhausting your "HP" at which point you're taken to a screen to restart the encounter or load a previous save

What does this actually represent? When you lose an encounter, is that Red "dying"? If so, how's that possible? My understanding is that only Red/Pink have the power to kill/liberate an immortal

Maybe the fact that you can restart endlessly - and that the narrative cannot progress otherwise - is representation of Red/Pink's immortality. It seems like Purple has some sort of awareness of this fact

I still feel like I'm missing something fundamental here, help me out