I wouldn't be entirely opposed to a religious prison (dont take that as approval though, just my personal sentiment). But, there are a lot of buts...
Prison code is some of the oldest legacy spaghetti code. Before any new prisons, we *really* need to improve the existing code.
Religious changes require some carefully laid out thought for some of the reasons Anaris and Lorgan already mentioned.
Religions are still essentially guilds, not realms, there are plans to change that, but they are just that, plans. So because religions are guilds, it means there are limitations on what can be done compared to a realm.
There are effectively three development volunteers, so even if anything *was* accepted, its unpredictable how soon approved changes would be completed. And there are quite a few pre-existing projects. I mean, statues and monuments only spent four years as an approved feature request before completion...
Religion code is also dated in many areas, like auto da fes and religious takeovers, including various bugs. Before adding new features, it would be nice to make sure the existing ones are properly functioning.
Most of these suggested changes, if approved, will take some time, not a few simple lines to change.
In terms of character death - character death has long been something that must be largely chosen by the player. They choose to become hero. They play an advy. They play on an island with universal mortality (War Island). They get banished from a realm and then go do activities that are likely to get them captured. We will definitely not be changing character death to something that is forced upon them against their will after they've been told that that they get a choice over their character's demise.
And I would stress Lorgan's last line on interaction. Mechanics are just tools to facilitate further roleplay. Religion especially involves a lot of cooperation.
For what its worth, I did start messing with having new characters and immigrating characters have to choose a religion, just like choosing a realm. But last week, I spent more time on getting War Island reset. This week, I have some real life things I'm dealing with. Eventually though, I hope to have that added step available.