I agree with this. I built my system 15 years ago with this in mind. It is freeing. But I still think Daggerheart still got it wrong. (We are currently in a Daggerheart campaign.)
There still needs to be a consequence. Consequences build suspense. If I, as a player, just get to choose my consequence, and one of my options are I go unconscious and nothing really happens, then it's a moot mechanic.
The GM is supposed to work with the player to show how things get worse as a PC drops. That can be all sorts of things: the adversaries are emboldened by the sight of a fallen hero; a NPC is endangered or killed because the PC isn’t there to help them; the villain has a chance to achieve their objective or take advantage of the opening to flee; etc.






