That's a very strange bug.
It seems like the post-battle cleanup isn't running properly, which is bad. If you don't mind answering, when you say you 'going down enough times', do you mean you've been defeated by running out of HP multiple times? Did you have the 'Wounded' debuff when you were defeated?
I'm basically trying to figure out when this is going wrong, exactly. I've not had anyone else report this so far, so it must be a rare thing, unless nobody that has seen has thought to report it, as you have.
I understand that the gif doesn't give details, so I'll explain it better. I go into battle after sleeping, which removes the Wounded debuff, have the enemy beat the tar out of me, and would get the Wounded Debuff like normal but with the visual bug. If I go get the snot beaten out of me again, I would game-over like normal. I do recall using a trauma kit mid-battle while wounded long ago and it got rid of the debuff, but I don't remember if that was before or after the bug. If this is somehow a very rare/ personalized bug and you can't replicate it to fix it, then I guess I got a funny copy of a otherwise great game.
Edit* If you'd like, I can share my save folder to you for the prepose of killing the bug and being able to study it so it doesn't happen to anyone else.
I've tried to re-create the same conditions to test, but it seems to be working fine, at least during testing. Do you recall what version of the demo you started with? Also, what version are you using right now?
I don't know if you can share files directly on Itch, but if you could share your saves, I'll definitely give them a look. Thanks for helping me with this, though!
I started with 0.1,0, and have downloaded each patch and imported saves properly. I THINK it might be because I hold either CTRL or ENTER to fast forward through the defeat dialog, and I know holding Enter causes animations / cut-scenes to fast forward in the over-world while Ctrl only skips text, but again, this is more guess work without actually recalling when/how it happened.
Current version I'm playing from: 0.1.2
Version the bug was first noticed with: 0.1.1
Rift pack included: Yes (Integrated to the game on 0.1.2)
Save folder shared through Google Drive
I hope this isn't digging too deep into your Dev time, and if you still can't figure out what is causing the bug, then I guess I got a more personal save file/ copy of a otherwise great game.