The first time I played it I could not die, even when the time ran out, but it fixed itself in the second playthrough for some reason. Anyway, aweasome game with a really cool concept!
I encountered that bug too while playtesting. I've honestly no idea how to reproduce it, seems random or at least you need to do some specific action at a very specific thousandth of a second.
Anyway, if anyone else runs into it, know that i hid an easter egg you can only encounter in that state. It was the best consolation i could implement before the jam ended :P.