These are the kinds of posts you get in trouble for. Don't make them.

E. You decide this game sucks and just quit altogether, buying none of the new DLC and possibly avoiding KI2 or whatever comes next.

Bravo indeed.

And E = one less rage quitter for the rest of us to deal with. Bravo!

Not true really.  As fighting games are competitive, most rage quitters that continue playing the game are decent if not good.  The rage quitters that suck at the game will quit playing shortly after they know they can't beat anyone so those wouldn't be playing any longer regardless.

Instead of the jail system, the game should recognize the player that didn't leave the match and give that player a win, give the player who quit a loss as well as add a percentage to his disconnect percent. 

As someone in the first page stated, "in before more people in jail than in the regular servers."  Something like this would probably be true.  Why break apart the community when you can give the one player a win, the other player a loss.  The reason most people rage quit is because they don't want to receive a loss, so giving them a loss simply because they rage quit would make some of them quit less and keep the entire community on the same server.

Putting people who rage quit in a lower class may also just have them give up on the game altogether, doing more harm than good for the community.

Every multiplayer game should have this. Seriously. It should work based on reports too (for other games).

I don't understand, it's 1v1, you can't win anymore, you forfeit. Why is that called a rage quit? Why stick around, instead of matchmaking for a new hopefully more evenly matched game. Forfeiting a game of chess is normal behavior, why is it called rage quitting in this kind of 1v1 game?

Disconnect, or forfeit willingly, you get a loss simple. If you're looking for a punching bag, play against the AI.

Riot Games (League of Legends) has done research into why people are toxic in games. (And I mean proper scientific method with control groups and so on; you can find their presentations online) 

They found that there aren't such people as "rage quitters". Those people are coming into the game stressed from other things and, on one or a few particular days, flame or ragequit. In other words these people, comprising the majority of all bad behaviour, CAN be reformed through positive social engineering. Making them leave the game is losing a genuine customer capable of positive engagement.

The number of people who deliberately and permanently act toxic is very small. These people can be dealt with by targeted permabans. They also aren't helped by the jail mechanic because they go straight back to doing it once out.

People rage quit because they know they are going to lose and don't want to waste the time waiting around for the inevitable to happen. Handing them a loss doesn't make a difference. Look at Madden for an example. If you quit in Madden, whether it's by simply dashboarding the console, or pausing and quitting, or pausing and conceding, you get a loss. And you get a disconnect percentage penalty. And yet, rage quitting still plagues the online public games.

The skill of the rage quitters is mostly irrelevant. People who are continuously rage quitting because they suck, might eventually move on to another game, but that takes time. And there's always fresh meat to take their place. But even rage quitters don't like people quitting on them. So if that's all they face, that's a great way for the developer to reinforce how shitty rage quitting is and get them to stop.

If Madden not only gave you the auto loss and disconnect penalty but then went a step further and made sure you could only play other losers who rage quit, people would do it A LOT less. I know it's not an apple to apple comparison since football games take a lot longer, but the idea remains.

And I am perfectly, 100% fine with someone who constantly rage quits no longer playing online. Awesome.

I love this idea. However, the matchmaking does need to be better at matching skill levels as well.