As Roger notes, this is the sort of thing that is there because players want their PCs to be relentless. I’ll add that many GMs end up modling adversary behavior after this PC behavior, and often everything fights to the death. Also an amazing number of GURPS folks forget about knockdown rolls. An average HT 10 human is 50% out from even a light blow to the head, or any major bodily injury.
If I was going for high realism, I’d double GURPS shock penalties, apply the normal shock penalty as a long term penalty until the wound was dealt with, use the realistic injury rules, and give most NPCs some disad along the lines of “If injured or threatened, make a fright-check like roll but failing makes you run, surrender, pass out, or similar”