dnd 5e – Self preservation: How DM NPCs love to live?

I keep in mind that humanoid NPCs do not "get mad at the death of light" as much as they should. Combat encounters often result in a total massacre, when realistically a single fatality would inculcate in the minds of all an idea the seriousness of the situation, which would result in a terrified retreat or an unconditional surrender. Anyone who is injured should begin to favor the preservation of their own mortality on success in combat. Obviously, these rules do not apply when NPCs are forced against their will.

Does anyone have experience executing this campaign style? How does a combat scene develop with these restrictions? How would the experience be rewarded? Can the game be rewarding and fun?