When your character dies in non-[Protected] areas, there is a chance that equipped items will be dropped.
This is called the character death penalty, and when it occurs, a [Cross] icon will appear in the upper right corner of the game screen.

You can recover from the death penalty by clicking this icon,
and dropped equipment can be recovered using Gold/Diamond currency.

For more detailed information about character death penalties, please check the [Death Penalty and Recovery] guide.