Any time the player can ensure their safety for 6 hours, they can rest. You do have to declare rests, even if they coincide with other RP or activity. This repairs armor, and heals non-maimed HP. Players may also trade words they've drawn from the deck amongst each other. It is at this time that you may level up. Being unconcious is not necessary to receive these benefits but sleeping is still a thing that exists, in theory.
Fate Weavers may resist death or heal a maim at the cost of one permanent tag. This tag must be gained from level ups. Tags from level 1, story, or temporary sources may not be used. Other players may pay the cost and heal each other, if they are close enough to lay hands on the fallen.
Upon taking damage that would kill, the player must declare which tag they are sacrificing (permanently) to instead be fully healed (including maims but not armor).
When healing a maim, HP for the limb is restored to maximum but armor remains destroyed. Maims do not need to be healed in reaction.
Roleplay-wise, the character experiences the loss of whatever quality the tag they gave up represented.
Healing words of power (Regenerate, Recover, Resurrect, Healing, etc) are allowed and encouraged to bypass this harsh requirement. Note : you can't use words of power as a reaction.
Example : A level 1 character dies. He gives up the tag [Cleric] to continue his life. He is literally no longer a cleric and should feel the void that creates. If he gave up [Stealthy] instead, he could still make stealth attempts but might feel clumsy or awkward.
Resting ticks time forward in a generally time-sensitive environment. Just because you can rest doesn't mean you should. Adventures in Words of Power tend to be designed in a constantly-progressing manner. This means that major characters in the world advance their agendas along a timeline. When and where you rest will determine the course of the overall story.
Example : Naruto will arrive in town at 06:00, sets the bomb at 12:00, and it'll go off during the festival at 18:00. If you arrive in town around 06:00, the Storyteller might describe a suspicious fellow walking around town and you'd have an opportunity to stop the whole thing. If you got into a fight with a rat and rested for 6 hours, you'd still be able to find him setting the bomb. If you again rested, you'd have no chance but blindly stumbling across the bomb. Without rests, you'd have many opportunities to be led to either of the first two events.