If you die several times, people who you came contact with will have the chance to get afflicted by a mysterious sickness called Dragonrot. There’s a way to cure them however. The first NPC that will get infected is the Sculptor. After talking to Emma, she’ll mention to collect blood samples for her to research for a cure.
If you die too many times after that, the next NPC who will get sick will be Anayama the Peddler. He’s the same non-hostile guy in Hirata Estate, looking around in one of the empty houses near the Estate Path idol. Back in the main timeline, you’ll find him by the gate near the Outskirts Wall - Stairway idol. If you give him some yen in exchange for some info, he’ll become a normal peddler in this same location. When he gets afflicted by dragonrot, you can talk to him to collect his blood sample.
Unable to give Blood Samples to Emma
You won't be able to give blood samples anymore to Emma if you chose to side with The Owl in the Shura Ending.
Once you have the blood sample, return to Emma. She’ll tell you that she needs time to study it and once you return, she’ll have a breakthrough. I’m not sure how long she needs so just continue exploring you discover new areas or defeated some major enemies. Talk to her again to discover that she already have a cure prepared. You’ll receive a Dragon Blood’s Droplet and a Recovery Charm.
NPCs who succumb to dragonrot will stay permanently dead for the entire game. Don't let them fall ill for a long time and attempt to cure dragonrot whenever you can.
The former is a consumable that you can buy from the Battlefield Memorial Mob peddler. Once you have these items, return to a Sculptor’s idol and you’ll see the new option called Dragonrot Restoration. Select that and all afflicted with Dragonrot will be cured. You can only carry one Dragon Blood's Droplet in your inventory and one in your storage. NPCs previously afflicted by dragonrot and were cured will not be affected anymore.