I tried promoting the idea that the level is only kept up to level 4, anything beyond is reset to level 4 with the XP being reduced to the XP limit for that level. In addition they could get a high tier research that increases the level cap to 6 and the XP to the corresponding level limit.
There have been many proposes about how you could just take away half their XP, their level or just reduce it to 1 again.
Personally I can see the problem with Titans being level 1 again after dying, it's hard to get back into the game. Unlike Caps titans cannot be leveled by money like regular caps so you cannot give them a monetary boost to reduce the impact of the previous loss.
And if you just half their XP/level that seems kinda random to me.
Increasing the costs of a new titan doesn't seem to make much sense, logically. Why should building the same ship cost more than building the previous one?
Increasing the build timer might be a good idea considering you increase the XP of the ship as well, but it should be a sensible change proportional to the XP the ship now has. A ship that is 30% stronger shouldn't take hree times as long to build.