EDIT: The orginal version did not produce any answers about physics. I know what life is, I have studied that for decades. I wanted to hear how the border between matter and spirit looks from the physical point of view, and I would prefer references to published works and widely accepted terminology rather than some hand-waving.
If we conclude by symptoms that what everyone else calls "life" is called "chaos" in the physics parlance, then the answer is simply "no", physics does not deny life, it calls it chaos.
Probably, what I called freedom is called "lack of causality" in physics parlance and it corresponds well with my definition of life in the sense that there cannot be something half-spirit-half-matter. Either there is a causal relationship between two phenomena, or there isn't, no third option. (I will leave for future the related question whether there is an original cause of all causes.)
Life means freedom and freedom means laws can be broken. If the laws can never be broken (including physical laws), there is no freedom and no life. Everything is completely determined and the time dimension is a mere decoration.
EDIT: I missed a big option here, that physics might not describe the entire world. Besides the physical world of causal relationships there might be other parts of existence also, which are free from causal relationships. The might not break the laws of physics, but also not be subjected to them. There might even be some interaction between the physical and non-physical worlds. In that context my question becomes very precise: is it possible to describe all phenomena with mathematical-physical-logical laws or (as I expect it) there will always be some phenomena that in principle cannot be described with such laws (chaos, spirit, life etc.).
From Michio Kaku's Physics of the Impossible I gather that the single biggest problem in physics is radioactive decay, there is only half-life, but no causality whatsoever for a particular particle to decay at a particular moment. Is it the loophole through which life enters physics?
In related question the accepted upvoted answer starts with "physics deals with the explanation of observable phenomena." That subjects physics to the ill-defined concepts of explanation and observation but I want a strict definition (probably it is not possible to define in mathematical-physical-logical terms what physics is, that would be a perfectly sensible conclusion and might even be provable). In that post the proponent presumes that all consciousness is limited (and probably the entire physical existence is limited). Is it really a necessary conclusion of the mainstream physics? The life-accepting eastern philosophies unequivocally declare both the physical nature and the consciousness to be infinite. That brings about the Goedel's incompleteness theorem, Banach-Tarski paradox and other conclusions common to both eastern and western sciences.
I am myself mathematician and consider the Goedel's incompleteness theorem one of the greatest achievements in mathematics. Am I correct to interpret that in context of physics it means: "not all phenomena can be described by physics"?.