It usually happens a lot faster in video games than 3 sessions in. If it happens later in a video game, it's usually a very short, very temporary scene of depowerment.

I had a whole paragraph typed out on my phone but didn't like most of it. By now many other players said most of what was in there already before I had the chance to proofread and reword it. The gist of it was though: Don't alter player characters or take their power away without at least one of those three being true:

• The player agrees beforehand and is aware it will happen.
• The player character has done something so horrendously stupid that it could've easily been their death so e.g. them losing a limb and now having a pegleg is them being lucky.
• It is very temporary, I'd say max 1 in-game day/1session and the player (not necessarily the character) is aware of that.

You might argue that picking that fight that would get them sent to hell would qualify as #2. But with you planning it out ahead of time it's less them doing something dumb and more the DM guiding them to do something dumb.

Giving you the benefit of the doubt of only 3 hour sessions and ignoring the time they planned out their characters, you let them play with their characters for around 6 hours by now and it'll probably be another hour or two until they "die". This might sound harsh but even with you backtracking on this, seriously entertaining this idea in the first place worries me about what else you might have in store.

Regarding the "OP staff of fire" one of your players has: Did you talk to that player about it in private? I find that usually players respond well to the DM being open about something being so overpowered it warps the entire campaign to the point where you have to design every encounter around it. I'd recommend approaching them about it in private, and not at the (virtual?) table when everyone's eager to play already.
Maybe you could just get the player on board to trade the item in for something less disruptively powerful. Essentially nullifying their magic item by being in hell where every enemy is fire-immune while everyone else still has some useful, fun magic toy feels uncool too after all.

Edit: and a player who wouldn't agree to "Hey, your item is so strong I have to design everything around it so you don't just steamroll everything. Can we, for example, have you meet a merchant where your character trades it for something else?" would react HORRIBLY to having it and all levels taken by force to the point where they'll just quit.