I think it should count as a death since otherwise it would be pretty cheap. You could avoid level 3s with no penalty aside from using AP. So at least since you're dying but your opponent isn't killing you, there's only the -1 point.
Can't use supers during level 3. Other than that, it's a great idea. Also, make it have a cutscene just to mess with people.
Oh yeah, forgot about that. But Radec's so manly that he can use that super during level 3s. Even cinematics lol