For multiplayer, sure. The latency is large and variable, so you have to make compromises. But local inputs are low and fixed latency and ideally you don't need the same compromises.

The ideal solution from a latency perspective is non-fixed time steps, but there are a lot of downsides of course. The rewind/replay solution could be improved with some tweaks. You could set a flag in the temporary time step to disable all irreversible state changes like dying, so you would never see/hear a flicker of death.

Why do you think you would see a flicker of death?

For local inputs, the fixed timestep is always a frame or smaller, this is not an issue unless you're over a network

Edit: Oh i see, this is a problem with the commenters suggestion of predicting the future though