I mean, worth noting that player characters can nonlethally attack with any melee weapon – not even totally necessary to give the guards blunt instruments, they just whack you with the flat of the blade, ezpz.

Yeah Sazza was kind of what made me think of it. I pretty much compulsively defend Sazza against execution every playthrough, and at some point I was like "Wait, why on God's green earth do they murder me for the slightest infraction when killing Sazza – who literally attacked the town with an army – is controversial enough to warrant a cutscene?" Sure, there's some argument for them keeping Sazza alive only for interrogation or whatever, but it still felt like a hell of an incongruity.

Prison breaks would be rad as hell, but they also fall under the umbrella of "complex thing to implement" – you can't really lock players up in a DnD-style game without giving them some way of getting out, and that pretty much inevitably involves a whole questline, as you implied. While I find the idea of hiding out from a wizard detective extremely compelling, I can totally understand why the devs wouldn't want to spend so much time on what is ultimately pretty niche content. (Players only encountering it when they fail at petty crimes might be bit of a low payoff.)