The explanation I've heard that seemed the most reasonable stated that cats don't "go off somewhere to die". While cats are good at hiding pain, pain is as real to them as it is to any other animal. Death, especially when not sudden, is usually accompanied with pain. Just as a cat would attempt to hide from anything that might hurt them, they hide out to try escaping from what is hurting, until death relieves them of the suffering.
I couldn't begin to tell you whether or not a cat is aware of the significance of it's pending death. But, hiding out when hurting makes sense.