Losing gives specific scenes based on what floor you're on. Losing on Floor 1, for example, has the scene where Karryn is brought to the backroom of the bar and forced on her knees, with the guys surrounding her.
To see other scenes in combat, you don't have to lose, but Karryn does need to have certain desire thresholds and other things met. For example, to have sex, she needs her pussy to be wet in addition to the other desire requirements. Early on, the enemies kinda just talk dirty to Karryn and you start slowly unlocking passives that raise her desires. As you play more, they get a little bolder, jerking off in front of her, or starting to touch her, and it eventually spirals further and further if you let it.
