It's a nice character development for her imo, more than a death flag.
I like the dragon and the fox, but I also really like Shuang-er character and she's getting better and better.
I think this is more about Guo Shuang regaining that portion of her soul that went missing when her Tan dynasty (or whatever) incarnation nearly died in the first flashback back when they were fighting the wolf-monster.
I really hope she doesn't die, since she is my favorite character.