let say that the combat system is same as Morrowind so so you can miss to attack
lower fatigue harder is to hit someone

well I think health should have similar effect
think you aren't exhausted but you're badly injured you almost can't fight

Well since attributes is folded into main stats, Strength and Endurance now represented with health and fatigue in more close relationships
Perhaps loosing health will decrease damage output in melee combat, while loosing fatigue will decrease weapon swing speed (so more heavy weapons what drain fatigue fast will have less swings) stat draining spell effects (magic, alchemy, diseases) will much more fearsome now,
I hope fatigue again have effect on magic and help for better concentrations during combat, so disturbed mage during channeling or charging will miscast spell, as well Magicka regeneration will be depend on current percent of maximum fatigue (like magicka don't regenerate if fatigue below 50% of maximum), so mages must stay full of energy to regain regeneration until will master something like combat meditation perk.

I think it has potential to frustrate many players.

Lets say you're in a dungeon, low on health and struggling to survive. At that point, do you really want the game to make it even more difficult for you?

Locational damage in a sense plays this role, since it is a direct affect of recieving damage.

But yes, I would definitely like more effects tied to your health.

I would like a blurred vision and out-of-breath effect when close to death. Accompanied by a difficulty to do most actions. You would have to plan battles much more.

Would add some excitement trying to escape from a losing battle while staggering around. It all depends on how the game plays out. If it is as combat orientated as OB then this wouldn't be good as it would just get frustrating, however if the player can avoid fights strategically without being punished then I would be all for it.

Tough life.
I know.
Play better.

Yes. Being able to fight with 100% effectiveness when you've 1% health left is too gamy.

definitely not a good idea

It should but only in a hardcoe mode, if there is one

Absolutely, it should affect how effectively we do all things. As long as its not a fiddley pain the [censored], of course.