Knock someone out and you have access to their inventory. So you could strip them naked(embarrass someone stripping them naked in a public place).
You could plant items on them, could be anotherquest like planting incriminating evidence on them.
You could have a whole quest line through the guards/barracks where you actually knock bandits out and are given a special set of magical cuffs to put on them via inventory and then you can "march" them back to town to collect some cash. You move up in rank and are given more cuffs so you can bring more bandits in etc.
Maybe you are paid to kill ne guy but one guy only and he's being guarded. You could sneak in if you were a thief, maybe distraction of a mgical type if a mage, or you could just kick everyone's butt on your away to the target via knocking them out.
It up a loot of cool stuff