There is a lost battle and there is a lost Day. When you lose a battle mid-Day, the men take you to a 'punishment' area, right? It's Bar Storage on Lv 1 and Gym's chain room on Lv 3, is that correct? Your desires and arousal stats are transferred to the punishment session, but not your stamina, energy and willpower, which are fully refreshed in accordance with your current fatigue. I am not sure if this is true in Prison Mode as I haven't played on this difficulty level yet, but it is true for Secretary mode. Thus, you have a high chance of actually winning the punishment session that brings back a few points of order, after which Karryn sleeps in the punishment room and receives a certain amount of refreshment. Her arousal also drops down. Not as much as if she slept in her Office or a Guard Station but on easier modes it's enough to be alert and fresh the following day and start sweeping the corridors again half-assedly. If your control decay is in low -3 to -5, you only need to win 3 to 5 battle waves before you can safely take a dive and be taught another lesson or two by those muscular savages. If this was a silly strategy, the game would not offer you an option to give up and then surrender completely. It's as if somehow the devilish devs want the Warden to lose and loosen up. Descent into the profoundest depths of depravity seems to be the end goal.
Again, I am not sure if this is sustainable on Prison mode but on Secretary it's a walk in the park.
Of course, it pays off to subdue level 1 eventually, so you may repair the bar and reception, gaining two new lewd activities and sources of income and notoriety. The upcoming update should make subjugation of Level 2 worthwhile with the expected Gloryhole job. Level 3 will have a Strip club and there are still two levels to be implemented. This will surely change the balance of the game and probably make it harder to farm experience by losing on purpose. But as it is, you can unlock a lot of lewd content fast by playing 'poorly'.