I came to this conclusion after a recent session. The "starter" undead encounter near the west gate ended with both Roderick and Scarlett dead on the ground, and they did not get up once combat was over (as will be the case in the final game, I assume). Madora and Jahan were both fine though. Jahan did have a single Resurrection scroll, so I sent them into town.
Incidentally, I hadn't done the "Fish thief" event yet, and it correctly did not trigger as I passed by with Madora and Jahan. But that is a digression.
I tried to talk to a vendor. The vendor complained about wanting to speak to my master, but at least I was able to complete a trade - which brings me to the heart of the problem: I had nothing to trade with. Roderick and Scarlett were the ones carrying all the stuff.
Fighting other enemies was out of the question with only half a party, and getting quest rewards was as well, as companions can't talk to NPC's to get quests. I was still alive, but it was impossible to continue.
In single-player, you should be able to loot your party members corpses after combat always. In multiplayer, there should be an option to allow the other player to loot you (disabled by default).
