Very interesting concept! I feel like this could have gone a bit farther. Instead of losing HP maybe the circle gets smaller each time and I can use other things to upgrade it? Bigger bullets will hit enemies easier but also me? It also took me some time to find where the shards were, so maybe a mini-map or something similar could be great here. The first five times I just died with zero shards.
Awesome take on the loop theme, enjoyable and fun. I feel like this mechanic has huge potential!