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How do you handle a campaign where a player loses a character and has to generate a new one that is less experienced than the surviving characters? Do you allow them some extra experience to get them closer in skill level or just make them rookies?

The game is generally so lethal at times and the power creep generally isn't that powerful. So new characters are new. The exponentially increased cost of raising things lets them catch up pretty quick anyway.

My GM gives us 75% exp from what we call the xp-pot where he saves the avarage of what we gain after every session.
Sure the game is very deadly, but it dont have to be. Idd say it all depends on the players and ofc GM.
Not that we had so many deaths this far even tho we played weekley for almost 1.5 year now.

I usually give new characters less than full xp, and then allow them to gain +50-100% xp if they died until they catch up, or +25-50% xp if they missed sessions until they catch up.
If they need a reason for this, I just say that the company of the more experienced characters inspires them.
But I play a pretty nice GM. I just want all my players to have fun.

I instead often try to increase the challenges they face, except if they really are green.