Yep, this is a topic that crops up again and again, so hopefully Larian will be looking at making using non-lethal attacks more interesting in the full game. The masks in Ethel’s lair are another popular request for different handling when using this toggle.
Personally, I don’t think just leaving the brothers lying unconscious in a goblin-infested area should lead to them living, but I do think that we should be able to heal any character who has been knocked unconscious and have them wake up (possibly after we’ve stolen their stuff). Most enemies might just remain hostile and attack us again, but a few like the brothers or the masks (after Ethel is dead), plus NPCs who have surrender dialogue, might turn neutral and have further content.
For simplicity, leaving someone unconscious just lying where they fell without reviving them in a particular timescale could, I think, generally be treated as killing them as they could be judged to die from their injuries without treatment. But again, there could be some fun exceptions built in for NPCs who can survive in other situations that mean we might meet some of the NPCs we knock out again (eg Gimblebock and gang).