I probably never death grip it. But I do modulate the amount of force. As @JonnyL points out, the operative concept is flop. This when the pick moves around in your grip. Most great players can modulate this to increase or decrease the feeling of attack. They’re not generally locked in to one level of flop or another.
For example, when I use a heavier pick and I want to play softly, I will increase flop (i.e. loosen up) as part of that. Because something like a 1.4mm Jazz III XL is a lot of pick, even with the point, and can sound pretty ungraceful otherwise, particularly on clean tone.
Lots of factors influence flop. When you leave only a tiny amount of pick exposed in your grip, this is going to give you less flop control. With so much of the pick braced by the fingers, especially with a large pick like an XL, you’re going to hit that string pretty hard, even if you try to hold the pick more loosely. So more pick sticking out gives you more range of flop control.
This is a cool subject where better data on grip force and the actual amount of flop would be useful. I’m sure most players fall in some kind of common band of both. Until then, I’d suggest just keeping in mind that some amount of flop is probably the most common approach, as is modulating that amount per the attack you’re looking for.
If you feel like you simply can’t play at all without holding the pick very loosely, then I’d look into why that is. In this clip, for example, when I played this, it felt like I was holding the pick pretty solidly:
I wasn’t specifically aware of allowing for flop. However, when watching it back in slow motion, you can see the flop pretty clearly when the pick hits the string on certain notes. So you shouldn’t feel like you are locked in to using only the loosest possible grip. You should feel like you have a range of attack possibility.