There are several mods created for Skyrim which have similar functionality. These mods are:
Defeat ~ (options for the victorious)
Death Alternative ~ (emergent mini-quests replace death and ressurection)
Sanguine Debauchery ~ (Slavery)
… and a few others
Fallout 4 also has a suite of similar mods for alternate defeat functionality.
Similar to original suggestion in this thread; defeated characters are in ‘downed’ state aka ‘bleed-out’; with several options such as Robbery, Execute, Revive, Enslave, Ravage, Tie Up…
This mechanic is also useful for gladiator events, fight clubs, where players compete in organized groups; one-on-one or team combat etc.
I’ll explore creating a mod with some of these features once CE is live; though these mechanic should be done by development; fully supported and robustly tested; doing a mod like this takes many months to a few years to get right. Development can do it in a few months.
These mechanics have never been done in a multi-play context; CE will be a great platform for exploring multi-play with emergent outcomes. Having other people in game with you will add tenfold to these types of emergent mechanics.
I call it “Emergent Disadvantage”; it is the aspect making Player Unknown so popular.
edit; slavery is handled with mini-quests. If a player thralls another player, mini-quests are offered, once you complete enough resource gathering, kill quests etc, you’ll gain access to escaping and/or weapons for killing your master, freeing other slaves, etc. Masters can manage player-thralls to extend the mini-quests; if they don’t eventually free their thrall they risk “Rebellion”.(See mods listed above, for more mechanics) Player-thralls can be captured by other players and enthralled or freed. Recruiting player-thralls into your guild where player-thralls become conscripts; a new take on recruiting for guild. Purge mechanic could also be used to free enthralled players. Death Alternative Mechanic can also feature in the Purge, where a defeated player is thrust in to a mad band of raiders razing forts and pillaging villages…