You know what makes no sense? How getting hit with a battle axe when your fatigue is low will hurt you, and getting punched when your fatigue is low will knock you down. It makes no sense.

Know what else makes no sense? How someone can block a blow from a claymore with their forearms...

Is there any mod out there that makes hand-to-hand combat more realistic?

http://www.gamesas.com/index.php?/topic/1091925-relz-improved-hand-to-hand-v12/

This should cover the hand to hand = fatigue damage for you. But in Morrowind you can't block without a shield...so I think you might have gotten that mixed up Oblivion's blocking system?

I agree, it's kind of crazy to block a blow from a claymore with your forearm. However, if someone swings it at you, you can actually grab the blade to stop it from cleaving your head open, or your body.
You'd have to be fairly fast and all, but it's possible.

Heck, it's possible to catch arrows in your bare hands, it's not easy, but it's still possible. (Note: This is like with bows from 1000s of years ago. Modern Compound bows can reach speeds close to the slowest bullet. 200 or so MPH)

Also, yes, Oblivion is the one that allows blocking without a shield.
Also, I thought if your fatigue was low, you have a higher chance of being knocked down by any weapon? Or maybe you just miss a lot, in Morrowind.
Then, again, I'm probably very wrong.