Struggling with the concept of conflict as "the worst that could happen to your characters"

I've been forcing myself to brainstorm a few quick story ideas a day based on some random dice rolls, just as an exercise to train my creativity muscles. Most of these ideas are quite silly and with cliché conflicts. So I was browsing around ways to come up with more "interesting" conflicts, and I came across a piece of advice that I have actually seen quite often before. Something along the lines of:

>the most compelling conflict always comes from asking yourself 'what is the worst thing that could happen to your characters right now?' and make them endure that

Not really a direct quote from someone, but just paraphrasing the core of it. But every time I read that advice, my mind immediately goes to: "well, they should all die painfully right now, then" or, at the very least, everyone they love should die painfully and they should be forced to watch it happen. I know it's a silly thing to think, because that's obviously not what the advice intends to convey. But still, that feels like its literal interpretation.

How do you guys interpret that approach so that it can lead to actual "suitable conflict"? Or do you have an alternative mindset when it comes to conflict generation?