It would be helpful to know exactly what you're talking about. Is the following what you mean by Trudvang's "wound tracker"?
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Assuming "yes", I would note this is reminiscent of games such as Hârnmaster. Getting injured makes you worse at fighting, which makes you more likely to be further injured, which makes you even worse at fighting etc. Or, in layman's terms the perhaps unfair term "spiral of death".
As for my feedback to the specific rule: too complicated and featuring exactly the kind of -1's and -3's D&D 5E don't do. Consider the much more simple "you're fine until you're below 1/3rd maximum health. When you're below 1/3rd maximum health all rolls, checks and saves are made with disadvantage" instead.
While mechanisms like this is probably a simple way to implement quasi-realistic combat, and while I'm not familiar with Trudvang's specific nuance of fantasy, I do know there's a reason Hârnmaster used it, I would argue it is out of place in a Sword and Sorcery setting.
The way D&D does not impose any penalties on you until you actually drop is what I would call the perfect fit for S&S games.
While I am fully aware many people like their games to be grim and gritty, I would still like to argue that's a different genre than S&S. Adjacent, but technically separate, in that S&S does not
require grim & gritty.
More relevant to this discussion, however, is that Xoth clearly isn't positioning the 5E Player’s Guide to the World of Xoth as an especially gritty game.
So I'd like to remind y'all of why we're having this discussion in the first place - the inclusion of an instant death rule in the Player's Guide. This implementation is not very different from the official massive damage rule in that it doesn't allow kill shots to characters with lots of hit points, only characters with few. (The difference is that it at least triggers off current hp rather than maximum hp - the core rule means you can basically forget about it once you're off the first few levels altogether, not a terribly functional implementation imo.)
Then I argued neither the PHB nor the Xoth rule does what it says on the tin, since you can't be instakilled while having lots of hit points. I illustrated with a rule that affects characters equally regardless of how many hit points they have.
Then I argued
no instakill rule is appropriate for S&S, or at least the Xoth variety of S&S, since a game based on this genre features heavy combat, and its heroes don't die to random arrows to the knee.
Now I'm arguing that at least for purposes of this thread we shouldn't assume grim and gritty Sword and Sorcery, even though that in itself is a mighty fine genre.
What I'm suggesting instead is two things:
- Make heroes have less big hp buffers so heroes aren't "too far out", meaning too far removed from the possibility of death. Extending the "sweet spot" to higher (and lower?) levels
- Refocus discussion from grim and gritty physical combat to instead "grim and gritty" magical spellcasting
Cheers