When Jimmy is knocked out, he fails any mission he may have been working on and despawns. The location he was knocked out at determines where he respawns - if he's in the Boys' Dorm he respawns there, elsewhere on campus he respawns by the door to the Nurse's Office. If he is off Bullworth Academy campus he is transported to the nearest Medical Center. He will lose items such as Firecrackers, stink bombs, and other weapons once he is knocked out.
NPCs behave differently than Jimmy when knocked out. They will collapse to the ground. All characters have lines of dialogue called FIGHB (Fight Beaten) that they may use upon getting knocked out. They will then lie there for several moments, and then abruptly despawn. Jimmy can target a KOd character. He has specific lines for taunting them. He can also continue to kick them, although this fills the trouble meter as though it were violence against that individual - e.g. kicking another boy raises the trouble meter to maximum dark yellow, but kicking a girl, little kid or authority figure raises it to maximum. NPCs also engage their KOd behavior if busted by an authority figure. Many but not all NPCs have a dialogue type called BOISTER that they occasionally use after winning a fight and KOing their opponent.
Dogs have health bars but can never be knocked out no matter how low their health bars are, making them the only NPC that cannot be knocked out. Rats do not have health bars but are immediately killed by any attack, including those that don't do any damage such as stink bombs.