Yes, that set of choices is irrational. If a 1% chance of irreversible death is worth more than $1000 for you to prevent, that's true regardless of your base chance

Why does that make it irrational? Why is it irrational that the amount of risk you are already facing can and should affect the amount you are willing to pay to avoid further risk?

Or to put it in more formal terms, why is it irrational to have a non-linear utility function?