If you just limit it to 100 though, you get the TiTS system, where even your max-level, full end-game gear character can still lose in 4–5 lust attacks (which can happen in like 2 turns if you're against a group of enemies). Similarly, it can make encounters too easy (especially bosses), so enemies have to be balanced out with either high lust resist, or the ability to lower their own lust gauge, such that it kind of evens out with regular damage. I also think it's just bullshit from a roleplaying perspective: why does my 100% straight as a pole male barbarian take lust damage from a femboy wagging his horse dick around? A lot of the time they handwave it with "pheromones" and stuff, but still.
I think a better implementation of lust or resolve would be to have it as a debuff bar, as you suggested: lower resolve would lead to lower strength, defences, etc. (all within reason, of course), down to zero, which would give the biggest penalty. I think being able to score a takedown purely with lust damage has been demonstrated to be simply too hard to balance.
One thing I think is missing in this RPG focused on character interactions as the primary content is the ability to get by without combat. TiTS has some of this, but it's 95% all about being a sub and taking it up the ass from everyone, so a bit more variety would be nice. The thing is, I don't find this combat system very engaging: enemy resistances hardly matter, and you can't take advantage of them anyway because unlike e.g. a Final Fantasy game, you only have 4 highly-restricted spell slots; there's not much gear and it doesn't have much impact on stats; and in general nothing interesting happens during combat (e.g. sex grapples or something where you temporarily incapacitate an enemy—and yourself—while getting some action as a bonus), etc., etc.
