The charter is indeed a brilliantly accurate overview of the current state of L4W, great job covaithe!
I prefer we don't impart more than a 1 level loss, regardless of whether the PC goes by willful retirement or permanent death. I certainly agree that we should encourage players to stick with and develop their PCs, not least for the sake of continuity of L4W adventures, but I don’t think players generally are prone to drop their PCs the instant a new source of mechanics are approved.
If you’ve played with your PC for years, chances are you’ve become attached to it. If you’ve mostly adventured harmoniously with the same group during that time, chances are the other players have grown fond of it as well – and in most cases the PCs have likely formed friendships. If the PC in question now suffers permanent death, the player has already been penalized by removing their creative brainchild from the game for good, the group has been penalized by removing one of their members from the established social dynamic, and possibly even the DM is penalized because his/her work on exploring a central part of that character’s background may now be mostly irrelevant – those are often punishments in themselves and their impact should not be understated.
Now, when a new PC is introduced into the group everyone has to adapt to the new dynamic, and fundamental underlying issues between PCs eventually have to come out and be resolved (e.g. new PC loathes tieflings/wizards/nachos and the group has lots of them). Level loss on top of this doesn’t make things easier for anyone as the entire group suffers from the lessened efficiency. One level seems quite sufficient to me.
If, on the other hand, a PC is retired while alive and well, chances are the player feels the character has fulfilled its purpose or just wasn’t happy with it. In the former case much of the above regarding permanent death may apply, in the latter case perhaps not so much. In either case the change is about people getting to play the character they have fun playing, so doubly penalizing the player seems a bit harsh to me.
Obviously I’m overdramatizing this issue a bit, but I think there’s good reason why 4E moved away from level loss – a significant level discrepancy between members of a party simply rarely make a satisfying game experience.
