When an NPC dies, upon respawning it should revert back to its specified spawn location. Instead, it spawns wherever you killed it.

I think you're right about that. Some NPCs like Turoths don't even have a dying motion or emote either

Hey thanks for reporting this bug!
I've just put it into our internal issue system and hopefully we can get this fixed as soon as possible.

Reference: blitz/engine#16

~Onur

Does it really? I swear I always thought it respawned in its specific spot

This bug has been fixed. NPCs no longer respawn where they die.

Moved to fixed