Can Single-Sided Liquidity Provision Lead to a 100% Loss of the Initially Deposited Asset?

Yes, a 100% loss of the initially deposited asset is possible, although rare. This would occur if the price of the other token in the pair were to skyrocket to near infinity.

The AMM formula would force the pool to sell all of the initially deposited asset to acquire the appreciating token to maintain the ratio. The remaining tokens would be the now-worthless small fraction of the appreciating asset.