- there are some players who like the survival type elements, like reduced carry weight, higher merchant prices, needing to eat, drink and sleep to stay alive. Personally, after having played with some survival mods for Oblivion and FNV, I realized that without these features, food and drink items are essentially meaningless junk.
- there are some players who enjoy "hardcoe runs" in games like Diablo, etc., where you rush to finish a game without dying, or similar combat challenges.
I imagine these two groups rarely overlap.
The "dead is dead" type of feature is particularly out of place in epic open world TES games where you are not racing toward any particular finish line, instead many playthroughs last hundreds or even thousands of hours without even touching the main quest.
Personally RPGs only feel challenging when I'm dying and reloading constantly, rarely surviving any battle without dying at least a couple times. This means in my case any sort of permanent death feature would mean either the game feels way too easy and becomes boring, or I'm dying thousands of times and never get anywhere, also boring.
So if i understand what you are saying then the answer to that would to just leave all the other options off and check mark the permanent death one.