TL:DR
My suggestion is to limit the skill loss (if any) to only be in combat skill categories. Loosing items is punishment enough; loosing combat skills that require an hour of afk nonsense is harsh; loosing crafting skills that take several hours of mind numbing, boring repetition is ridiculous.
Yesterday I took a chance hunting a bear and I died. I did go back, picked up my junk, and killed the bastard with three more arrows. I knew I was playing with death, but I thought the fun was worth the risk. It turns out it wasn't at all.
My alignment is 74, but I lost 2 skill points and not 1 as the Wiki says. In addition to risking twice as much loss as I thought, the skill loss set me back more than I expected and made me wonder if risking death in open world PvP fun is worth it. I think it is not.
I lost 0.25 point in 8 skills each. I don't care about the loss in Battle Survival and Equipment Maintain and both my Artisan and Carpentry was set for reduction anyway. I lost 0.25 point in both Ranger and Swordsman, which means something like 10-15 minutes afk training with an afk partner for each. The 0.25 I lost in Healing means another 10-20 minutes active work on an afk partner, so not a super big deal either.
But, the 0.25 point I lost in Herbalism means 2-3 mind numbing hours of active harvesting herbs (maybe 8 hours afk harvesting) plus 10-15 minutes of active mixing preparations.
Total time to recover for the loss of 1 point in the 4 skills I care about is about 4 hours. Sorry guys, that is just not worth it. I am playing several games where I can PvP, but LiF MMO will not be one of them. I am playing games for their entertainment value, not because I am looking for boredom.
I am not new to full looting games and I have no problem with it, but while most other games will set you back with the items you lose, few games punish you by making you do stupid crap for hours and hours. Loosing combat skills that mostly require afk skill training for up to an hour is enough, loosing crafting skills that takes hours and hours of mind numbing repetition to recover is not.
If I had known what I know now, back when I started, then I would still make a PvE toon (but I would have known to make it a female miner) and I would still make a PvP toon, but I would only use it for PvE to get a little bit of skill in as many categories as possible (purely to "risk" loosing skill there). Unfortunately, I have already spent many many hours on the PvE side of my PvP toon, so now it will be for PvE only.
I suppose a lot of the PvP players are less concerned about skill loss than I am because they knew better and only do PvE with that toon to have "cheap" skills to loose in the lottery. I have painted myself into a corner with my "PvP toon" so I have been cured of PvP in this game.