Basically instead of dying when you lose all of your health, you fall down, your screen fades into red slowly and you cannot move. Once your screen is fully red, you die.
When passed out, other players can pick you up by clicking your body, and then they can click to put you back down. If you gain health while passed out, you go back to normal, and you start out with 10 hitpoints which gradually increase to 35 hitpoints.