Such a thing could allow actual barfights instead of bloodbathes, and settle disputes without attracting major guard attention. Implementing this would also allow for a bounty system similar to Red Dead Redemptions. You would get a bonus for bringing a bounty back alive, rather than bringing back his thumb or something. Of course, this would mean an option to tie things up would have to be implemented. (Take whole towns hostage )
Of course, this would be optional, possibly by holding the block button while finishing. And if accidentally done, you would have the option to do an execution while they are unconcious.
So, in short:
Would allow for bounty missions
Activated by holding block or some other non-attack button during final blow
Solve domestic disputes without killing the person
Optional
New way for pacifists to play