Or when one or both sides regard negotiation as demanded by honour or morality or custom. Or when one or both sides think they are better talkers than fighters. Or when one or both sides believe negotiation is more likely to deliver desirable results.Negotiation will only realistically happen when a) one side knows it cannot win and tries negotiation as a plan B, or b) both sides realize the cost of continuing (or starting) battle will be too high.
Aragorn negotiates with Sauron's armies, once Sauron has been defeated, because that is what will serve Gondor's interests, and what is fitting for an honourable king who rules justly rather than by force and terror.
It's pretty standard for a player in Burning Wheel to keep at least 1 persona point in reserve to ensure that his/her PC won't die if a mortal wound is suffered. This doesn't make combat dull.Combat, which is very, very usually lethal for someone involved it (NPCs mainly of course unless you are playing Paranoia) is dull if the players understand that their PCs cannot die.
In RPGs like BW, RM and RQ, it is also quite common for combat to end with one participant alive but hors de combat due to wounds suffered.
So a PC being unable to die is not tantamount to a PC being unable to lose.