@seanethermore yep, this is a big mechanic bug for some people. But don't get your hopes up for support to fix it. Cause it seems too many people don't have it for them to fix what only a few people are experiencing.
I also have seen this exact issue in the Trickster caves. Where the spikes killed me while retracted, AND deleted the final boss/captain in that main cave so I was unable to complete the mission after he had spawned. It made me restart the mission, wasting a huge amount of time.
Totally agree though, cause lots of bugs are causing huge time delays on these Tall Tales missions 'for some players,' but too few it seems to get the attention of the dev's. Cause I didn't hear a peep from support after posting several tickets about this issue.
Don't expect sympathy from other players either, they would rather crucify you with "learn to play" or question your capability of playing when they don't even look to see how long you've been playing.
Regardless, i agree, the the spikes proximity hit certainly needs to be fixed. Makes people (me) not want to play this game much.