Yes, the non permadeath way of dying is something which already existed in coop mode.
when you are ghosting you can turn normal again by moving over the bubble spirits (or reloading the page) no need to fiddle with permadeath.
The next version will contain a change so you can s till interact with the inventory and use the homeblock or teleportflag again, after which you will stop ghosting.
Sometimes it can take very long to find the bubble spirits.
I am still overhauling/refactoring a couple more things for version 0.6... so I can't say when it will be released