FFXIV ARR: Death Penalty
When your HP is reduced to zero in Final Fantasy XIV: A Realm Reborn, you are KO'd and rendered unable to perform any actions. In this state, you are left with two options: either return immediately to your current home point or wait for another PC to revive you using an action or spell such as Raise.
In addition to rendering you temporarily weakened, suffering a KO also severely damages your currently equipped gear. When a piece of equipment's durability reaches 0%, its stats drop significantly, so do not forget to repair your gear regularly.
Gear damage through KO is only experienced if you have reached level 10.