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It all depends. If I am playing good I usually do not let characters die, however when I was playing evil I freed the Brawen only because I was going to fight the mage nearby and he usually kills one of my guys. So in the battle Brawen died and then I removed her from my party just as I planed. So, Yes you may use NPC's as fodder, with that one exception I usually reload if it is someone I wish to keep.
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