Hey! Sorry for the response delay 😅
Yes, this is a spelling mistake, it's clearly "1 in 6 chance". And yeah, you roll a d6, and on a 1, you lose one torch.
For the wear/use, it's the same thing in this game as the rule are pretty light. Of course, you can do whatever you want with your character, and twist the rules as you whish, as long as the game is fun for you. There's no "true way of playing" in the TTRPG world 😉