The transformation lasts for the duration, or until the target drops to 0 hit points or dies. If you concentrate on this spell for the full duration, the transformation becomes permanent.
Given the positioning of the second sentence, I believe it is safe to assume that it is providing an exception to the transformation ending by either of the two methods described in the first sentence. In other words: yes, it's really, truly permanent.
As far as balance goes... strong, solo monsters will have Legendary Resistance that will prevent them from failing saves so easily. Everyone else has to rely on their friends to break the Wizard's concentration.
Consider the counterfactual where only the duration is permanent, but it still reverted at 0 hit points. This wouldn't prevent you from turning an enemy into an object and burying it somewhere. Even worse, think of the utility capabilities of the spell if the permanency didn't prevent you from reverting. Players could cast True Polymorph on themselves and all their party members, becoming powerful CR16+ creatures - then proceed to fight to the death - at which point they revert back to being fresh level 16+ characters!
As to why anyone would take Power Word Kill instead of True Polymorph... let's say you're going up against an Ancient White Dragon. You've managed to spend a few rounds burning through its Legendary Resistances. You cast True Polymorph on it. Your spellcasting DC of 19 (6 proficiency + 5 intelligence modifier) still lets the Dragon make the save 40% of the time, and you've now wasted your only 9th level spell slot. Compare to Power Word Kill, which is guaranteed to end the fight in half as many rounds as it would normally take. Moreover, True Polymorph has a range of 30 feet. If the Wizard seems unduly interested in getting into close range with you, its time to run far, far away.