I won't go into details as of what Battle Fatigue is in real life, although THIS sums it up pretty nicely. The TL ; DR version, is that a person loses efficiency, in a statistical way, depending on the amount of battle and / or injuries they have accumulated (along with other things, that are too dark to elaborate). This can be emulated with a Trauma mechanism in the game, so death has some consequences that go beyond material loss and punish people who actually went looking for trouble, as w