Heres some Corruption system ideas

Those are not social consequences, those are a death sentence. Quite literally. A Red player is a juicy target for any other player. That Red player wouldn't survive even 5 minutes near a city, let alone inside it. And exactly because of that he'll just have a friend kill him and loot whatever he drops.

But you're also suggesting that Red players literally lose all their shit if they die to remove corruption. Which would most likely just lead to people making alts in shitty gear and just PKing lowbies, because no normal person would be PKing with those kinds of conditions.