The DE from The Matrix Online Manual LINK
Death
When your body in the Matrix takes enough damage, it ceases to function. This truth is so fundamental to the code that drives the Matrix that not even the best Operators can prevent it. They have, however, developed a workaround. When your body is killed in the Matrix, it can be copied and reloaded elsewhere.
When you die in the Matrix, your consciousness is forced back into your physical body in the Loading Area, and it cannot return to the body you left behind in the Matrix - not the same body, anyway. (In fact, when you die, your Operator will erase your corpse entirely, to avoid complications.)
Upon the death of your body, you will have two options. The first is to left click the Reconstruct button and return to the Loading Area. You can then quickly return to the Matrix via any Hardline you may have access to, reappearing in a new copy of your body. The second option is to be restored by another player, if they have the correct skills to do so. Upon reentering THE MATRIX after being newly reconstructed, you will suffer a temporary penalty to your performance for a short period of time.
The thrid option that is not mention in the manual, is not to click the reconstruct button, but that dosen't change anything. You would have to wait the same time before the DE is gone.
In every MMO there is a penalty when you die, if I am correct? The question here could be (and also already suggested in this thread by others) either change the DE because it don't have the same purpose anymore, as it was intend to be today according the manual. Remove the DE from the game.
I don't believe the DE only was created for PvP, but an idea could be to have 2 DE's. One if you die in a PvP and one if you are killed by NPC's. Just an idea....what the penalty would be I have no suggestion for that yet.
I agreed on that something should be done about the DE as the purpose today might not be the same as when the game was launched.