Soooooo. . .did Max die or not????!!!

Its up to the viewer to decide.

I've seen one theory that suggests Noodles is just imagining Max coming out the secret exit.Much like the way he didn't directly acknowledge Max's identity,it's "just the way" he sees things.

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I've always assumed he died, but some of the other theories are interesting. Leone himself said he wanted the audience to doubt their own assumption. To "not be sure even though they know". Kinda vague but interesting. Not leaving it completely open to interpretation but only the slightest ambiguity, like most things in life that make decisions in the real world so hard.

None of it happened as Noodles was high on opium in the den trying to deal with snitching on his crew. It's all a frug induced fantasy for him to justify his actions.

If it's all just a delusion, why do we even care enough to ask questions about plot points that don't actually exist?
Assuming the depicted plot is real, I think Baily can't stand that the hypocritical dark powers he's in bed with have outmaneuvered him and that his death is inevitable and the only way he can attain a kind of purity, or a twisted kind of redemption, is to be killed by someone who he deems worthy of taking his life. It's something that would give him satisfaction in that he would know that he orchestrated and thus was in control of his own demise. When Noodles rightly refuses to be manipulated by Baily, Max does the next best thing and takes his own life in a horrific way because he would find redemption in the fact that he suffered as a price paid for the way he made Noodles suffer. This justifies his death in his mind.

However, it is interesting that the garbage truck has Chinese characters on it and do actual garbage trucks have churning blades in back? Also, those cars with the singing passengers seem very surreal and out of place, like they belong in the The Great Gatsby era rather than 1968. Maybe it's just a question of how far his delusion goes and which parts of the movie are in question.