The way I understand this passage is that "death" refers here to physical death, because the child of God has eternal life. John is saying that believers can commit a sin for which their heavenly Father will remove them from this life physically, perhaps because they are disgracing Him, perhaps to stop further sinning... Look for example at Ananias and Sapphira in the book of Acts. They were were guilty of a lie and God chose to end their lives.
... Simply wrong, but that is to be expected.