When it dies it loses all items and the world resets to a new random seed. It learns to stay alive quite well but sometimes falls into lava or gets killed by monsters.

It only gets a +1 for the first iron pickaxe it makes in each world (same for all other items), so it can't hack rewards by repeating a milestone.

Yeah it's surprising that it works from such sparse rewards. I think imagining a lot of scenarios in parallel using the world model does some of the heavy lifting here.