It's probably a typo.
Permanent loss of Magic Points doesn't really make any sense, because all Magic Points are spent permanently. They regenerate back to POW, but the points spent are lost forever.
I'd be very surprised if this means that POW is lost, as it applies to all Chaos Spirits. Having said that, traditionally, being destroyed by Chaos means total annihilation, so maybe that#s how it should work. I wouldn't play it like that, though.
