Thanks for reporting this! That bug has to do with certain party members being KO'd after the bossfight when the party is being reorganized (more specifically, the way the cutscene is coded involves every party member except for one being removed, and if that party member is KO'd then the game sees that as the entire party being KO'd, hence the gameover.) I'll make sure that's fixed for the next patch, though honestly I have no idea why turning on diet mode fixed the issue (but I'm glad it did!)