Persistent effects (in this case VFX 386, but likely others as well) are removed on death, though become visible again on server resets or with the use of a DM's "Fix Character" tool.
I've observed this bug on my character and one other in the past (in the case of a character with a persistent swarm of flies around him, who abandoned him every time he died and returned on resets).
Other circumstances (such as being knocked unconscious and standing back up) have triggered the same erasure of effects, though inconsistently. It is a guarantee on being corpsed, however.
It can be consistently replicated by applying a persistent VFX to a character and then killing it, which I discovered as Brimstone's guinea pig, and which he might have more details about.