Currently Negative Levels are functioning in a manner that is I believe broken, which causes the death penalty effect to be broken.
Not sure exactly how it affects mobs, but any character affected by a negative level is affected by two (Or more based on the class) levels worth of debuffs. Doesn't matter what your class is, you're taking a -2 to hit (-2 levels for a full BaB class, more for any class that isn't) a -2 on saves, and a -2 on skill checks. I pretty sure this is caused by the game registering that you have negative levels, and applying an appropriate penalty, and then recognized you have the debuff of a negative level and penalizing you again. I know it would be just about impossible to code for negative levels removing specific level dependent effects, but it seems like if this is intentional it's a bit overboard.
So are negative levels working as intended? A developer response would be greatly appreciated.