I understand there were some morale changes in L3, started a new game and they seem a bit too strict. I went to a whorehouse and slaughtered everyone within 7 turns, since I spawned right next to the house. Usually in that situation once the highwaymen go down, that's it. But amazingly, all 4 of the hoes left on the map were unpanicked and had pistols. I killed some of them just to see if it would cause the others to surrender, and nope. Making it harder to cause a surrender is cool, but I mean, I didn't even get any panics at all it seemed.
Also did a crackhouse, killed everyone, last guy standing was a b-boy, all of the final 3 were unpanicked.