You basically answered your own question you now, you just didn't realize it.Quote:
Why is it that you can die and the world
will end, or you can live and save it? This is, in a sense, a free choice and
thus time cannot be static.
Squall and Co must be alive for the game to be complete. It's part of the line of time that they live and defeat Ultimecia.
If they die, you get a Game Over screen. With them dead, the game can't be completed, time can't be fulfilled. Hence when they all die, the game ends. It's not supposed to happen though, which is why you merely load up to a previous point and carry on as if nothing had happened.
For the game to be completed, they must stay alive. This fully supports the unchanging timeline.