On 1.3.0 when you are killed by a hydra in the twiligh forest, no grave is spawned.

It looks like this happens if you die within the hitbox of the hydra

I'd guess the hydra destroys it.

Can confirm. Death was within the hit box of the Hydra.

this is resovled by updating YIGD https://www.curseforge.com/minecraft/mc-mods/youre-in-grave-danger