Mid combat seems like a bad idea, but on loss? Thats a great idea.
I don't really care for TF stuff, so any feature like that really needs input from the people it'd be meant to serve.
But in
any case, it would not be enabled by default. If any regular monster TF'd you on defeat, it'd be either a special thing for that specific monster, or it'd be an option in Game Modes like level scaling is.
Can even do both defeat and battle. A game mode option like "Enemy Transformation: Off(default), On Loss, In Battle" Like how some other options have different levels. Parasite content, notably, being Off, Half Chance, On.
It would be work to add it one way or another, and I personally don't want to do it, but it wouldn't surprise me if people pushed the idea and it ended up an option in the future.