I want the player - even a weedy mage - to lose a fight but not die. How can I limit the amount of damage a hit can do?

(I want to make the player to go through different stages of concussion as their health declines - so simply making them essential and then using OnEnterBleedout won't do quite what I want.)

Could the PC cast a healing spell on themselves?

Either when his health is at a certain level or timed ... or something?

You could briefly flag the player as essential. You'll go down to one knee, and you can do what you need to OnEnterBleedoutState or whatever, and then unflag him.

Reduce player health by 75, trigger as essential, OnBleedout then is coded to put the player back up but with a set of penalties? Repeat the cycle until player goes down four or five times?

Yes, I think this is what I'll have to do. Thanks.