Legen Dary I choosed to do that so that people won't die on purpose or save to get hearts faster. I think that break the game a bit
I thought that was the reason. I understand it, but I think that's a risk you should take. For example, I just beated level 6, but I died almost 20 times. Why? Because since I always restart with three hearts, I keep dying and dying. I don't know of any fairy near the dungeon, and I can't save and retry because I start back at the beginning. So it's a doble combo: 3 hearts + restart at the beginning.
In my opinion, you should change it to restart always with full hearts (I know it can be used by some people in the way you mention, but I prefer that other tan the frustration of always beginning with 3 hearts in a dungeon with no grass). And it will be better if you could save in a dungeon and start in its entrance too.
Hey, but don't get me wrong, this is one of the best quest I've ever played, and I still don't know exactly why. But it is just pure fun, I love it.