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Indeed it does -- over 5-10 seconds on average, actually. Mana is used more to limit rate of fire as well as what spells you can cast; it's not used as a "how long can I stay out in the wild" limiter. That's what your health is for.
We actually had tried it many different ways, including with mana potions that you had to use to replenish mana, as recently as early beta. It was annoying indeed! Players told us about it, and we agreed and changed it.
Feel free to check out the demo and see what you think for yourself; nothing like taking it for a test drive rather than taking our word for it.