From the campaigns I've DMed, I've gone for a bit of an in-between. My primary focus is to have a fun, shared narrative. I'll always let players do stupid things that get them into grave danger. But at most, I'll usually only ever kill a few of the PCs.

If they act carefully, they can avoid getting into that situation all together. If they act stupid, they may have some deaths on their hands, but never a TPK. I don't want that kind of narrative dead end.

The other thing, is that I will never put the players in such a situation in which there isn't a way out of it. Usually this comes down to abusing the rule of cool a bit. Maybe they use a well aimed shatter to collapse a cave and separate themselves from their enemies. Maybe they jump down the cliff into the river below. Maybe the enemies have taken such a beating themselves that they find they aren't willing to fight to the death.