I have used a "death spiral" system in my games to great fun of the players and myself. Some quotes I have from them are "that battle was way more intense than the other ones" or "I'm surprised we made it out of there alive". In my experience, my players had fun with it and embraced it. I also didn't just have it happen and there was no way to balance it. I made it as an entire subsystem keyed off of BAB.

The subsystem worked by having 4 different levels of combat capability (CAT I) 76%-100%, (CAT II) 51%-75%, (CAT III) 26%-50%, (CAT IV) 1%-25%. Each different level, starting with no modifier, adds a cumulative -2 penalty to any and all dice rolls, to a maximum of -6 at the lowest tier. At 50% and lower, your movement speed was also cut in half (rounded up to the nearest 5 ft interval). The way that I balanced this was that you made a BAB check rolling d20+BAB. The DCs were increasingly difficult to succeed on, but for each one you successfully make the overall penalty is reduced by 2. The DCs were 10 (CAT II), 15 (CAT III), 25(CAT IV). The jump at the end was intended to show that you're reaching the very end of your fighting spirit and vitality and the ebb and flow of battle has worn down on you till nearly your breaking point.

Examples:
Spoiler: Example 1
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A first level fighter has a constitution of 16 giving him/her 13 HP. At the start of combat an orc throws a javelin and hits him/her for 6 damage. This reduces the fighter to 7 HP or ~54% of his/her HP total. This puts the fighter in CAT II. The fighter must succeed at a DC 10 BAB check (+2 modifier) or take a -2 penalty. If he/she succeeds in the check no penalty is taken. In the next round of combat, the fighter takes another hit from an opponent dealing another 6 damage dropping him/her to CAT IV. He/She must now make 2 BAB checks, each at a DC 15 and then DC 25. In this example, the fighter succeed at the first check and took no penalty, but failed the next two netting a -4 penalty to all rolls and 1/2 movement speed.


Spoiler: Example 2
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A 14th level Wizard with 84 HP (maximum for a 14th level wizard with 14 Con) is in combat and gets sneak attacked by a rogue for 49 damage. The wizard has been reduced to CAT III (84-49=35, 35/84=.416~42%) which means the wizard must make a DC 10 and 15 check (+7 modifier) or take -4 on all rolls if both are failed, only a -2 if one is failed and one is succeeded.


The point being that as fighters/barbarians/full BAB classes go up in levels, it becomes easier for them to succeed on these checks and that rate is slower for 3/4 BAB classes as they are typically NOT front line fighters and even slower for 1/2 BAB classes as they are never formally trained in front line combat tactics.