One big glaring hole in your system: It only accounts for negative game-mechanics actions. i.e. abandoning your unit, or perhaps murderous looting rampages. It completely leaves out any kind of accounting for actions which a character may take that have no game mechanics basis. i.e. betraying a non-mechanics oath, or starting war by using murderous settings to cause your realm to switch sides in a key battle, appointing the worst enemy of your religion as it's new leader, or any of innumerable actions where the game mechanics can't measure the effects, or have nothing to do with the actions taken.
I do like the idea of expansion of the HP system. Tom once came up with a pie-chart based system. He defined four characteristics for each character, and the actions that you took in-game each contributed to those four characteristics. I forget the four attributes (you may be able to find it on the wiki somewhere...) but they were things like honor, infamy, mercy, and something else. Now, the kicker was that they were displayed as a pie chart, and not absolute values. So it didn't matter what your total numbers were, just the fraction they accounted for of your total make-up. If Infamy was your biggest, then you would have a big black wedge, whether it was 5 out of 10, or 300 out of 500.
