the "reset" that happens when you lose but don't give in to diesel is a pretty decent solution, though getting through the guards once you've lost 3 times can be a bit of a slog. (not saying the game is hard i actually think it's in a good place i just tend to lose on purpose)
one thing i might suggest is just turning off the mandatory recovery of clothes after that 3rd loss, it's not like he's going to actually fight or keep them on lol.
i always love having the option (more or less) to choose the lewd option and i hope there are more "pink" dialogue choice in the future, reminds me a lot of third crises which explores similar themes quite well.