Crew deaths are based on hull damage, so that would just result in a more complicated version of the same calculation. The only way to fix the combat rating system is to remove it.
Yeah, that much I figured, but there are certain Skills (Salvaging, Damage Control) and Hullmods (Blast Doors, Recovery Shuttles, etc.) that directly help reduce Crew Deaths regardless of Hull Damage sustained during Combat and non-combat operations, which I think makes sense would directly affect Crew Morale much more than just the ship being damaged.
I must admit I don't know how Automated Ships with AI captains behave with the mod. Do they still get Crew Morale and Specializations regardless of their non-human nature, or are these things disabled for them? I always thought the direct buffs from the ship's reputation were representative of how the crew's experience improved the ship, so I'm not sure how AI ships are affected by this.
Thanks for your quick response either way.