This seems like the intended mechanic. If you were hit in the head with a pipe wrench, you'd likely go down, right? I think it's right on, but that's my opinion.

I experienced something like this in the new interior of the jail at Balota Airfield. I was picking up a item, a baseball bat, and saw a player behind me, he attacked me, knocked me out and ran. As I woke up, I was inside the buildings geometry. When I logged off and on, I had a new character.