Yes, but this is the truth for most martial arts. You simply cannot practice them 'all out' without hurting others. They have been modified to ensure their practitioners are not seriously harmed in their quest to improve their skills. However, at their origin many years ago, they were intended to hurt and finish the fight.
If anything, the concepts you learn while practicing at your dojo probably don't require much modification/improvisation/inspiration to turn into something more dangerous should the situation call for it. Given the fighting context of the game, it isn't unreasonable to assume that the character has adjusted his art accordingly.
If this isn't the way you want to go, perhaps you could explore the avenue of imposing penalties to the opposing character, such as slowing his actions down for a time while he is under the re-orienting effects of the punches/kicks?