As a matter of design, there is no "master node" in a MultiChain blockchain. If you're talking about the node which set up the chain, then if you never gave high-level permissions like admin or mine to addresses belonging to any other nodes, then the master node failing will indeed mean that no more blocks can be created, and no new permissions can be set. So you should ensure that administration and mining control is spread across multiple nodes, to prevent this being a problem.