The thing about Oblivion that the simulation tends to run up against is that hitpoints and death are an abstraction: a real human would die much more easily from the injuries that get inflicted, but also a real human would avoid a lot of problems in the first place (and have families that would take over their shop, and live in cities with more than twenty people hanging around). You run into trouble when one part of the simulation is taking things as symbolic while another part is taking it as literal. If you want it all to be literal you've got to be willing to go super deep into the emergent simulation.