In what way does the death of a company “destroy” people in planned economies and how does that differ from the free market?
When a company dies almost nothing bad happens, infrastructure, employees and resources are mostly transferred to companies that have better ideas how to utilize them. It's easy to improve company wide planned economy by killing it and creating another one with better ideas at almost zero material loss.
The problem occurs if you artificially protect companies from death, from competition, then they grow to large sizes so their death becomes materially impactful diminishing of the main benefit of having companies.