Hiya!
While I understand the philosophy inherent in your question, and generally agree with it in theory, in practice that is not what GMs do by and large. We present situations, locations, personalities and so on, and let the PCs loose on them. But it is hardly a hands off action. We created all that stuff in the first place. Also, there is no "naturally behave." All that is is the GM making decisions and justifying those decisions. The reality is still the GM choosing to do things, using their own preferences, the players' actions and the dice to inform those decisions. It is a good practice but I don't think we should fool ourselves into believing there was ever some natural or right decision waiting to be discovered like a sculpture in a block of marble.
I think we are just misunderstanding each other a bit.
I don't see anything a DM does as being "hands on action"...at least not past the point of him needing to actually, well, do DM stuff. What you said had me think of someone asking a painter, "Paint me a picture of something beautiful. But don't want a painting". You can't "do painter stuff" without touching a brush and paint. When you do start painting a flock of butterflies over a flower field, people can't claim "You did that on purpose! That's not your job...you were supposed to just 'do it without affecting it'". Makes no sense.
So when I draw two levels of a ruined Keep, then start doing all my DM stuff of thinking who built it, why, when, how did it become ruined, what lives there now, etc...I don't see that as the DM being "hands on". When I hear of OTHER DM's that have the preferred method of "Building to the PC's"...well,
now we have distinctly "hands on" action. The DM is specifically placing two ogres in that room, and not five cultists because the DM knows the PC's are strong on martial, weak on spells, and there's only 3 of them.
Same idea with regards to how to "run a monster/npc in a natural manner" (as pertains to the game milieu as a whole). It would be "hands on" for a DM to play the cultists as just as stupid as the ogres, because in the game, they shouldn't be (all things considered). Now, a DM that plays the ogres as dumb brutes who love violence and suffering, or the cultists as fanatical zealots who work together...that DM isn't, imnsho, being "hands on". He is, in fact, not "justifying decisions"; he, the DM, didn't, at that very moment, decide to make ogres stupid brutes. They just are (assuming 'normal by the book' ogres, obviously).
My original question -- TPK or imprison -- is really one about approach. There is no rule or requirement that either would be the "right" answer for the question "what would the duergar do next?" That question, and the idea that there even is a "right" answer for it, is just cover for the real question: what do I, as GM, think would be the most fun for this group of players, given the tangled mass of everything that has happened up to this decision point. It is the same question we ask ourselves, as GMs, every moment in the game.
Or, at least, I ask myself. I suppose it is possible there are real world GMs that always only care about verisimilitude, but I doubt it. If a GM doesn't recognize that there are other people across the table from them, I don't think they would be very fun to play under.
I get that. My point was that you, as a DM, from MY perspective and experience, should put more emphasis on "what would be the most logical for the campaign world and situation", and less on "what would be the most fun for this group of players". But this is
definitely going to be a "Group Style" thing, for sure!
As I said, with my group, if the situation looks like it's going to be a TPK, and then it isn't, because the orcs who were rampaging the countryside suddenly have "knock out gas and shackles", and the PC's all wake up chained together to a post in a big cave...well...lets just say I'd get a lot of the Stink Eye Cantrip!
You know your players best; if you think they'd be more happy if you let them live, then go ahead and do that. The drawback to that is what I've said in other threads; once you start down that dark path, forever will it dominate your destiny! Meaning the Players will start to expect you won't kill them if there is some kind of 'out' you can take....and then, when you DO refuse to give them that out and they all TPK (or even just one or two die in a single battle), then they WILL blame you...because at that point, you most definitely chose to 'kill them'. It's obvious at that point. Save, save, save, save, save, TPK! Save, save, save, save, TPK! Etc. ...versus... TPK, TPK, semi-TPK, Save, semi-TPK, Save, Save, TPK, etc. If the Players know you WON'T save them, they appreciate it more...and they can't "blame you" for their deaths. If the Players know you WILL save them, they expect it...and then if you EVER 'let them die', they will "blame you" for their deaths.
^_^
Paul L. Ming