The man could face a lot of challenges. First, he'd need to deal with the immediate loss of protection from the elements. Then, he'd have to come up with a plan to replace what was lost and find a way to stay safe. It's a tough situation for sure.
In certain renditions of the original Pinocchio story, he does die. This could be as a result of various challenges and mistakes he makes along his journey, serving as a moral lesson.
I don't have the exact location for you. It could be tucked away in a secret cave, or maybe it's accessible after achieving a certain level or fulfilling particular game conditions. Keep looking and exploring!
No. Pinocchio is a fictional character from a children's story. It was created by Carlo Collodi. It has elements of fantasy like a wooden puppet coming to life, which doesn't happen in real life.