I'm of the opinion that PvP is either fun or it isn't and people will primarily engage in it based on that.
Adding penalties to death does nothing to really make the actual PvP engagement itself more entertaining. It just serves as a disincentive to repeatedly rush back into a fight to the point of trivializing a victory.
No I don't think your idea would help an already PvP starved server and would actually result in empowering the fungi twinks to grief any new blood that still might come on the server.
TLDR: no.
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