UFC will have contingency for when this happens, and it probably will happen, sooner or later.
It's dangerous sport but its not the only one, and its not just combat sports that are dangerous either.
Proper Football (sorry had to get that in)
Winter sports (skiing etc)
Extreme sports (mountaineering, sky diving etc)
Those are just a few of the top of head.
I doubt a death will make the sport go away but it may prevent expansions.