The world would be in shock. The media would be filled with reports of his death. Civilians who had always seen him as a symbol of safety would feel vulnerable. There would be mass mourning in the cities he had protected.
Ryuk would probably just be amused. He is a Shinigami who has seen a lot in his existence. Fanfiction is just another strange human creation to him. He might chuckle at some of the more outlandish ideas in the fanfictions, like a character having superpowers beyond the Death Note.
Naruto could see death magic as just another form of power that can be used for good or evil. If he witnesses it being misused, he would be angry and try to stop those using it in a harmful way. He might also try to befriend those who use it for good and learn from them. He would adapt his fighting style to incorporate defenses against death magic, like using his shadow clones to test its limits without putting himself in too much danger at first.
I often find that the best death battle fanfiction are the ones that not only focus on the fight itself but also explore the characters' emotions and motivations. It adds depth to the story. Like, a character's reason for entering the death battle could be more than just for power or glory, it could be for revenge or to protect someone they love.