Last Stand is a state of Axie when it doesn't have any HP left, but still can fight a bit longer.
Last Stand will happen if this condition occurs: $FinalBlowDamage - RemainingHP < RemainingHP * Morale / 100$
Final blow is any hit that would kill an Axie. Last Stand will NOT trigger when an Axie dies from damage over time or any other debuffs. The formula means that Axies with high Morale are more likely to enter Last Stand.
https://axie.substack.com/p/axie-infinity-community-alpha-guide