Keep in mind that NPCs only count as knocked out by in-game logic if they bear the Temporarily Hostile tag underneath their health bar. If they do not have this tag then they're a permanently hostile entity which is intended to get killed and removed from the story.
In your case Nettie was permanently hostile at that point so even if you knocked her out and she lived in the Grove, she'd still attack you as soon as she saw you the next time and by doing so pull the entire Grove against you, which would break quests and locations. So to avoid this from happening they made it so that NPCs without the tag count as killed and get removed from the world.
I wish as much as everyone that it wasn't so, but it is how it is unfortunately.
