She rose to her feet and headed to her room. A lord can only log out in a safe room. Mostly sleeping bedrooms, hotels, inns, or thereabouts. The same applies to wanderers or adventurers. But there will also be exceptions to the rule. Those lords or adventurers who sleep and log out in non-peaceful terrain like the wild or no man's land risk being assassinated, robbed, or killed by wandering spirit beasts.
Yes, your thinking is all correct. The bodies of players remain when they log out. The initial beginning of this update and upgrade made many players wake up in revival graveyards when they logged in. They complained. No one replied. They were forced to learn fast.
When players wish to log in, they must seek the safest place to log out. Those in the wild will have to pray to whatever Gods they believe in. Waking up unhurt in the wild is like winning the lottery. Having your property not stolen is a legendary feat worth broadcasting to all worlds.