Knock out is a combat function in DnD, it's there to let you not kill someone. It's something you can choose to do as a combat attack.
So it's not meant as a "knock people out to loot them" sort of business, but a "I don't want to kill you" sort of business. Generally when you want some information. Which brings me to the goblin at the windmill.
Wyll asks you not to kill him. The game want's you to just hit him til he surrenders. Fair enough. But the game TELLS ME to not kill him. And the game GIVES ME the option not to kill him. So I knocked him out, and that didn't do anything.

I don't think knock out should let you off the hook with people, but it should at least give you conversation options, and the opportunity to get off the hook.