>>543855928
It's not explained very well. At all. Towards the end of Chapter 1 when you talk to the doctor there is an exposition dump about how those pringles cans are actually warp machines that punt your combatant bodies down.
It also mentions that the life core or whatever can run repairs on your body BEFORE it gets used, but i'm starting to think that's some translation fuckery and it means that the life core repairs your body BEFORE it gets sent back up. So when Big Ugly turns her into a tube of toothpaste the life core auto-activates and performs the emergency recall and repairs the body. Can't do shit about the mental. It's a lot more understandable that she suffers a breakdown when she's experienced both becoming mashed potatoes and then being forcibly reconfigured and repaired in two seconds.
The only other alternative is that they have fully functioning clone bodies that consciousness can be transferred between, but i've seen nothing in the story at all that hints to that.