Xp loss on pvp has been in game since it was in open beta 18 years ago.
There was no lcoin or ncoin stores back then. No microtransactions. It has been a part of L2 since L2 was a thing.
They could make it worse and let you drop items completely instead of just to a restore window when you die to mobs again , or when red drop items to other players again.
This is the easiest version of L2 there has been for retail yet.