Weapons - i.e. swords - start out blunt, so slashing at an opponent and slowly taking down their health incrementally works in a real-world sense as though you are just brutally beating the person down until they cave from being the one with the most damage. As upgrades and better weapons arrive, the opponent begins getting real-world damage like cuts and possible amputation depending on the quality of the weapon. At this point the opponents also rise in skill and are better at defending themselves. Enemies start losing their "damage sponge" quality and become serious opponents who can one-shot you, which also demands that you as a player become better at defending yourself.
The implementation of this needs to be quite a gradual learning curve as each new enemy will be a lesson in either strategic attacking or strategic defence. The goal is to make third-person mêlée combat far more dynamic by adding realism.
This idea is derived from seeing so many fantasy-based games treating swords and their ilk as mere batons that have different levels of damage and the enemies themselves not being affected by the actual real-word concept of that weapon, e.g. a sword stabbing or cutting an actual hole in someone.
An argument against this might be the idea that combat could end up very short at later stages of the game if all it took was one correct swing to connect and cut an enemy in half. Realistically, the sword would probably only slash a gaping hole, but the enemy would still go down because of it.
An answer to this, is to make the later stage enemies very good at defence, and make the swords themselves degrade as steel connects on steel.