There's 4 ways in the game it will give you the instant death screen.
1. A compartment is destroyed.
2. The compartment is completely flooded.
3. Your ship took too many overall hitpoints set in the .zon file of the ship.
4. Crushed by pressure.
I'd prefer crushed by pressure every time. However the flaw with my method of giving equipment flotability is that you can never correct the list. Somewhat realistic but I am now using a balance. It works amazing most of the time. However sometimes I stop the flooding with my deck awash. Strange seeing a scharnhorst at periscope depth.
I just assume I'm dead when this happens.