I'm so bad, I guess I'm a good tester for you since I'm sure I won't be the only one who gets confused like this. XD
And gotcha on the conversation not being clear. But yeah, I think that I probably won't be the only person who thinks she died because of assuming they're talking about the protagonist in past tense. I think I literally restarted the game after I got that route originally (I was really lucky and got that route first) thinking it was a bad ending. Lol. But, I'm sure in the full release obviously that will be more clear because we will be able to continue.