I don't follow this... The sailors change to subdual when WHO is on bended knee with a bad beating? When one of the party members is on bended knee, or when one of their fellow sailors is on bended knee?
The sailors change to subdual damage when the party members are on bended knee. But, in all honestly, I don't think the party members would know that. They didn't say, "Let's knock them out." It was more like, "Get'em!" All the party members know is that these guys are hitting them hard and it hurts. If I was the DM, I wouldn't announce something was subdual damage till after the battle...unless it was obvious.
Also, are you saying that the sailor uses lethal damage AFTER the Ranger is down on the ground (and unconcious?) OR are you saying, as a result of the lethal damage the Ranger is down on the ground (and unconcious?)?
The Ranger is almost down and not attacking (0 hp). The sailor takes out the blade and thrusts it into the Ranger.