Why not, murder is a good solution. There shouldn't be tolerance. It's a fantasy world.
Are you trolling?
I get caught stealing a wooden spoon. The punishment should be death?
It really ruins the immersion when something small like this goes wrong any you're stuck with either having to murder the entire village, or having to reload. If they can apply some kind of reasonable consequences, then we can just continue playing with the negative consequences.
GAME OVER as an outcome should be avoided. Any time you have to reload the game it breaks you out of the immersion.