Different combat groups will have different levels of "calibration", but my general feeling (and I think this is echoed quite a bit in the WMA/HEMA world) is that you should do what is martially effective, but always in a way as to attempt to avoid actually injuring your opponent. Accidents happen, of course, but the intentional injury is simply something you don't do. When in the ring with your opponent, you have a sort of pact with each other, that you're trusting the other person not to intentionally harm you.
With that in mind, it's often a good idea to agree on a "power level" (or equivalent) in advance of the fight, IMHO.