Thank you very much for your response! This is exactly how we assumed it would work (since it does work like that in Mouse Guard sans Hit Point allocation). However, p. 58 of the SG was not so clear for us to mean that - good to know what the intention was.
What is therefore the meaning of the “Fog of War” (SG p. 81) procedure of reassessing Might post-conflict (emphasis mine):
At the end of a conflict, before processing the compromise,
compare the highest Might participant on each side who is still
standing. Use those relative Might ratings to determine if the
original intent of the conflict is still possible to achieve.
If Disposition always equals the sum of HP and conflict ends only when Disposition of one side is reduced to zero, then how could someone be determined to be “still standing” on the losing side? I understand that one could not kill a Might 5 beast if our only Might 4 character fell before we reduce them to zero, but the paragraph explicitly mentions to check for Might “on each side”, before compromises are made.