Do the goblins also use wooden swords? In that case, I would agree with that, knock-out states make sense. But then it should be the same both for lowly footmen and more experienced fighters, and thus be a factor of the weapon used against them rather than their skill level per se.
Anyway, you make a good point at the end. I guess having not run into any goblins yet thus far, I just haven’t experienced this problem. If it is as you describe it, then of course I agree, that would be less than optimal. I just objected to the notion of early game footmen (who should by all accounts be weaker than the stronger kinds you may attain later in the game) being knocked unconscious in situations where late game fighters would be killed, for the purely gamey reason of it being acceptable to suffer losses later on in the game. But I’m sure a solution could be thought up that fixes the problem you describe without having to forego realism in that way.
Insofar as you would tend to run into weaker enemies fighting with wooden swords and various other non-lethal weapons early in the game, the knock-out mechanic seems like a good solution. I just don’t know if I would necessarily like any hard restrictions on that by itself. I’d rather have it be that you have to be careful to select a starting site where you are unlikely to run into overly dangerous enemies too quickly, and that you would feel some pressure to get defenses up ealry-ish. That probably couldn’t very well be done in this stage of the development of the game, though. But it’s fine, now that overly dangerous enemies aren’t in yet, as far as I know. (Although the numbers of the goblins may yet be a bit of an issue.)