It should be noted that RWBY proper introduces reincarnation as how the setting works. The original reason the God of Light denies Salem's request to bring Ozma back is that he refuses to interfere with the process by taking a soul out of it.
And, in a sense of great irony, he ends up interfering with the process (by making Ozma remember his past lives) as a result of Salem's actions.
That too, which meshes well with the fact that the cycle before the Narrator cut it was a cycle, not an afterlife, not a resting place, a cycle.
The fact is that I find the possibility of existing forever without change far more frightening than the possibility of my components being reused anyway, we already are in a constant process of some of our cells dying and being replaced. We take parts of other beings to make it our own every time we eat, why should the same happening to *us* be a problem?
The big advantage of the nothing after death is that you won't have to care about it once you are in it, it will pass just as fast as the nothing before birth.
Edit:
And when it come to this little thing:
The infant is not the child is not the adult.
Put an adult version of you next to the toddler one, do they have the same personality? No, of course not.
Create an absolutely perfect duplicate of a child, down to the very soul, then put the two in different situations, then compare them when they're adults, will they have the exact same personality? Of course not.
Personality death is a normal part of life.