Maybe he faced an extremely powerful enemy that he couldn't overcome. It could be a new and terrifying monster created by the Titans or some other dark force.
Perhaps he was betrayed. There could be a character who was secretly working against him all along. This character could have led him into a trap or weakened him somehow before the final blow. Another possibility is that he made a mistake in his judgment, like trusting the wrong person or misinterpreting a prophecy, which ultimately led to his death.
The other characters would likely be devastated. Annabeth, his love, would be heartbroken. She might become more withdrawn and determined to avenge him. His friends like Grover would be in deep sorrow, feeling as if they've lost a part of their strength. And the whole demigod community could lose hope, as Percy was seen as a great hero.
It might also be related to some sort of enemy or threat that specifically targets Percy and his relationship with Annabeth. The enemy could be so powerful that Percy realizes the only way to stop it from harming Annabeth is to sacrifice himself, like if the enemy feeds on his life force or his connection to Annabeth, and he chooses to end it by sacrificing his own life.
It could start with Artemis getting into a situation where she's in a vulnerable position. Maybe she's been lured into a place where her powers are diminished. Percy, being a friend and an ally, rushes to her aid. Along the way, he has to fight through hordes of lesser monsters, which takes a toll on him. When he finally reaches Artemis, they are confronted by a really powerful adversary. Percy realizes that the only way to save Artemis is to take the full brunt of the enemy's attack himself. So he does, and that's how he dies.
One great fanfiction could be 'The Hidden Path in the House of Hades'. It explores the relationship between Percy and Annabeth in more depth during their time in the House of Hades. The author adds some really interesting side quests that the characters embark on, which makes it a thrilling read.
Perhaps he has lost too many people close to him. If his friends, like Annabeth or Grover, were to die in a particularly tragic way, he could be so grief - stricken that he no longer wants to live in a world without them. He might think that death is the only way to escape the pain of their loss.
Some fanfiction writers may do it to stand out. Since the Percy Jackson series is so well - known, creating a version where he is a devil can attract attention. Also, it could be a way to explore darker themes. The original series has a lot of heroic and positive elements, but in fanfiction, making Percy a devil allows for a look at the other side of the coin, like how his powers could be used for evil instead of good.
One reason could be that the writer wants to create a more angsty and dramatic story. Sally's death would be a huge shock to Percy and the readers. Another reason might be to test Percy's character, to see how he would handle such a great loss.
The 'Redemption Arc' is also common. Some fanfictions focus on a character who has made mistakes in the past, like a minor villain, and they get a chance to redeem themselves in the House of Hades setting. It adds an interesting layer of depth to the story.
On the other hand, she could try to honor Percy's sacrifice. Annabeth might focus on the reasons why Percy died for her and strive to fulfill any tasks or goals that he might have hoped she would achieve. She would carry on his legacy in a positive way, even though she is heartbroken.
The other characters would be devastated. Annabeth, for instance, would be heartbroken. She has been through so much with Percy, and his death would leave a huge void in her life. She might become more withdrawn and less trusting. Grover would also be deeply affected. He has been Percy's friend since the beginning, and he would probably blame himself for not being able to protect Percy. The other demigods would lose their hero, and they might feel less confident in their ability to defend Olympus.