The reason for this suggestion is that someone may want to do a playthrough where they are native to Ultra Space and live there, but it is hard to do that when you get teleported back to the Overworld so easily. This is an alternative option for someone wanting to live in Ultra Space.
Or alternatively, could include an "Ultra Space Local" option upon creating a world that would set the spawn to be in the actual Ultra Space dimension, cause beds to explode in the Overworld rather than Ultra Space, and the "teleporting upon fainting" mechanic would apply to the Overworld rather than Ultra Space.