I don't like that idea because they are basically robbing you which in a strange way should be encouraged and discouraged. encouraged because you were a good target and they can take your stuff, discouraged because it may not matter because they get a bounty worth more then the loot.
you want to design the game where being a jerk has its penalties but you can also be a bandit if you choose that style of play. I'd imagine someone camping the butcher would be in town, near lawmen. A bounty system would fix the problem.
a bounty system needs to be implemented that follows characters through server changes.
for example: you kill a player with a npc or player witness. you get reported. you now have a permanent bounty on your character for 25.00 - 50.00 dollars. increasing per NPC/player you kill that gets reported or seen by lawmen. Honorable players can accept bounties and hunt down the player. the player being hunted now have a leaving server timer to prevent killing and disconnecting leaving them open for sweet justice.
a few things happened: we've cut down on RDM and griefing, added a new bounty hunter feature, but still made people carrying valuables a reasonable target for outlaws.
otherwise the unintended consequence of your suggestion is everyone kills a 3 star buck just for murder protection and that just feels weird. you should be a target if you have valuables on you. that's the wild west