[Snake]

It's a bug to lose on Last Chance, totally. You're not dead yet. (Maybe because of how Last Chance works, you need to die first for it to trigger. This wouldn't happen if Last Chance made you immune to /all/ damage that could make your HP fall under 1 for the rest of the turn's attack. But hey, people and their 'balance'. Blah Blah multihits lol.)

On defeat in battle? Nah. There's an accessory (Ice Collar, 2 unresistable ice damage) to prevent this that everybody wants to ignore, and making it only delete your spirits post-fight would make it fall in complete oblivion, if people don't use it for what it's supposed to do already.