I'm not super familiar with Blades, but please tell me if this comparison position is accurate:
'Yes I know I just took enough hit point damage to KO my character, and I know part of that is because I chose to take a bunch of additional damage last round, but it's not dramatically satisfying for my character to miss the rest of the fight'.
Is this a different proposition to your Blades example? Would you expect a D&D GM to undo some of the damage?
I would say that it's a pretty good comparison, yes. Stress is a stand in for Hit Points to some extent, but it's more about effort or willpower or some combo of both. There are actual Harm rules that are separate from Stress.
What also makes Stress different is the player can never ever lose it without choosing to do so. It's a player resource that cannot be taken away or reduced by the GM.
But otherwise... yes, when it's gone, you're out of the scene (whether from exhaustion, fear, mental breakdown, temper tantrum, whatever may be appropriate based on the circumstances). Not making the character be out of the scene is definitely along the lines of letting a character who ran out of hit points in D&D continue to act because they ran out while pursuing their brother's killer, and it wouldn't be dramatically satisfying not to have the character face the killer.
In my eyes, it's clearly a disregard for any concern about game... which by default means a disregard for player agency.
Uh, no, not at all. There are certainly GMs who abuse their authority, but this isn't really about abuse is it? The GM has a fundamentally different role from that of a player. To argue that the GM should be bound by the exact same rules as the players is just odd because they have different functions.
Well, it isn't always the same rules. I mean, they have different roles in play. But there are also rules that generally apply to each.
All we have to do is look at combat to see a very functional play space, where there are rules that are expected to be followed and honored. D&D combat is a fine example of a game with mostly clear rules... though sometimes they may be hidden from players. But players can approach combat with pretty stable expectations. If I roll high enough to equal or exceed a target's AC, I hit and roll X for damage. If I cast Fireball, I'll do full damage to those who fail to make a saving throw, and half to those who make the throw... unless they have some exception based ability. And so on.
This allows players to make informed decisions. They know their hit points, they know how many times they can use a given ability, and so on. They likely have a sense of their opponents' capabilities, and they can proceed with the expectation that the rules will work as expected. That the GM won't just say "no, I don't think it makes sense for you to beat this guy... he's supposed to be the greatest swordsman in the land, so I've decided he gets away" or whatever.
There's not any reason that other areas of play cannot work with that same level of expectation.