Nonreciprocal interactions break action-reaction symmetry in systems of interacting bodies. This process inevitably introduces non-Hermitian dynamics which with its hallmark signature called exceptional points (EPs) has been a subject of intense research across different disciplines ranging from photonics to metamaterials. Whether non-Hermiticity and EPs are a fundamental property of nature and if so, how nature utilizes them to gain competitive advantage have remained largely unanswered. Although biological systems feature many examples of non-reciprocal interactions with the potential to drive non-Hermitian dynamics, these are often theoretically overlooked and not experimentally investigated. Here, we demonstrate in an active matter composed of social animal Caenorhabditis elegans and bacteria, non-Hermitian dynamics, and the emergence of EPs owing to the nonreciprocal nature of oxygen sensing, nonequilibrium interfacial current, and bacterial consumption. We observed that when driven through the EP, the system collectively breaks parity-time (PT) symmetry leading to traveling waves and arrested phase separation. We further find that these features enable the collective ability to localize interfaces between broken and exact PT-phases. Remarkably, this ability provides a strong evolutionary advantage to animals living in soil. Altogether our results provide mechanistic insights into the detailed symmetries controlling the collective response of biological systems; answer a long-standing problem; and give an example of the EP-enabled dynamics in a biological system.