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The narrator zooms out here to give us some classic epilogue comments about what happens after the main story:
(a) Hazel lives longer than many rabbits;
(b) The warrens prosper, including Watership Down under Hazel; a more free Efrafa under Campion; and the new warren between the two that is "half Watership and half Efrafan" (2), just like Hazel proposed to Woundwort in chapter 43;
(c) General Woundwort becomes a mythical figure, a cousin to the Black Rabbit;
And then some rabbit spirit comes to Hazel and invites Hazel to join him in the sky.
(Who comes to Hazel? A bunch of critics think it's Lord Frith. But we don't—we think it's El-ahrairah. Here's a clue: the rabbit is described as having silver light in his ears, and in the story of the Black Rabbit of Inlé, El-ahrairah gets new ears with silver starlight in them.)
Whoever it is, Hazel goes with him. So Hazel dies—but the warren lives on after him. (Until people come to build an apartment building probably.)