I call bullshit on your "explanation". How can something, that does not effect you unless you are hit, promote slower gameplay and lower deadliness factor? It in fact increases lethality of the game, shortening possible fighting time.
Right now: You get hit on the head and survive. You look for a millisecond to the hp bar, 20% is left. You continue playing like nothing happened.
As suggested. You get hit on the head and survive. You look for a millisecond to the hp bar, 20% is left. However, you do not know how much did the last hit handicap you, so you can choose to retreat or retaliate. For retaliating there is a risk involved because your immediate next attack might glance due to you being slower with lower PS, thus giving other player more chance of killing you.
Which example gives more chance of shorter duel because it is more deadly? Also, which example forces you to revise tactics because of the handicap factor?
I call bullshit on your invalidation of my argument.
If you get hit, which is basically inevitable with the amount of threats on lets say a battle server, your stats get negatively effected, thus decreasing your killing power. I haven't counted the amount of times where I survived a round of battle without getting hit at all, but they are few. Very few.
Using this system, near the end of a round you would have a bunch of snail-like teddybears trying to breath eachother to death. Cause everyone got hit somewhere and has lower hitting power.
Also, experienced players of this mod know their build. They get thrown severely off their game if they lose athlethics point for example, which would be really frustrating.