If a unit’s HP reduced to 0, a unit is defeated. Depending on your selected difficulty, units can retreat or die permanently. Here are the key differences between the two difficulty levels:
Casual Mode:
* Units retreat from battle upon defeat. You can deploy them again in the following battles.
* When Byleth gets defeated, you won’t get a game over.
* Your game over condition is when your entire army has been defeated.
Classic Mode
* Defeated units are gone forever (possibly except for key characters like House Leaders)
* If Byleth gets defeated, it will result to an instant game over.
Aside from strategic positioning, proper training/grinding for your units, and frequent Healing, you can also take advantage of the Divine Pulse mechanic. This will allow you to turn back time a few turns before the fatal mistake that will cause the demise of a unit or Byleth.