Recently I took on one of the escort quests and was tasked with protecting Mercedes on her way to Shadow Fort. Unfortunately, she died on the way without me realizing it. I have not seen her around since.
Do killed NPCs permanently die when... killed?
Yes, unless you have a Wakestone to revive the NPC when they are dead.
No. It's unclear to me which NPCs respawn and when, but I can personally attest that at least Asalam the innkeeper respawns. There are claims that it takes an ingame week or that he reappears in the end game, but these are flat out wrong.
I had Asalam appear after more than an ingame week before I had even met the Duke.
I failed an escort mission taking Selene somewhere up north of Gran Soren, but she was/is still alive, and there was even an optional quest involving her that I completed shortly thereafter. I do not know if all NPCs revive, but apparently at least some do.
