Yes, you can offer a concession that kills you. From the glossary:
Concession (Playing the Game, page 206): An alternative to being taken out in a conflict, wherein a player accepts defeat for his
character (or the GM, for an NPC) in exchange for being able to
dictate the terms of that defeat.
Going further and checking out page 206:
A concession has to pass muster with the group before it is
accepted—the conditions of the loss still have to represent a clear
and decisive disadvantage for your character.
On that same page:
If your group does permit calling for character death in certain
physical conflicts, expect players to use concessions a lot to avoid
that final fate. This is, in fact, exactly what you want—it ensures
that when a player does decide to fight to the end, it will be over a
conflict that has a lot of meaning for the character, and if he dies,
the death will resonate in the emerging story.
The key point to a concession is the control of the narrative. The narrative might still lead to death or some other fate worse than the the attacker intended, as long as its appropriate to what was done. I do think, however, that any violation of the First Law (or any Law) should be narrative driven, and not merely dice or GM driven- that's one of the things about a storytelling game. It's not about punitive results of player actions- that's standard GM thinking taking over there. Any violations should be discussed and planned out, and the player a full agent in this happening.
A couple of anecdotal examples:
In the first example, the player knew that he had to leave the game, but he wanted control of the narrative. It wasn't for bad reasons that he had to leave- just other responsibilities, and he did enjoy the character and wanted to play until he had to end. We talked, and he had this on the table. I prepared for the eventuality, but didn't write his story. At a dramatically appropriate time, he took a hit for the group that would have resulted in all of them taking damage. He conceded to take himself out, and then cast his Death Curse to create a backlash of the energy of the Warlock that they were facing. He decided the timing, the narrative, and the results of his character's demise.
In the second example, a player had started out as a teenager dabbling in necromancy that was seeking redemption. An earlier encounter had been played with the others having doubts about his staying on the straight and narrow, with them hearing an offer of power for him taking out the necromancer they were after. During the combat, I compelled his trouble as I offered a concession of the necromancer's accidental death from impaling from the force of his spell. This was crafted in this way because we thought it cool for the narrative, and it we negotiated that it explicitly did not have him break the First Law (nor have to take the power), it just looked like it did for the cool effect on the story.
The key to both of those cases was the was the control of the narrative (and communication), and I think that's the key to any concession- who gets control of that.
A note brought on by a comment:
From YW206
If the group (note that your opponent is part of the group for this!)
feels like your character is getting off easy, you’ll need to rework
the concession until it’s acceptable.
A concession is an offer, but it isn't just one that is merely refused. Note the phrasing - "pass muster with the group". If the other parts of the group say it seems like that 20 shift fireball would kill him, you don't get to just say no. The whole group looks at it and decides collectively. Also, if the answer is no, then you work it out, unless the controller of the one offering the concession withdraws the offer.
Point being that the player throws the "Massively Overpowered Fireball" and the NPC chooses to offer a concession by dying (per the OP's concern).
Doesn't the player have the option of refusing the concession (and thus the death) and retaining narrative control when they Take Out the NPC? (Where they can choose instead to have the NPC scorched, blown backwards, and unconscious rather than dead).
– MortimerGraves Jan 30 '13 at 19:31This would make the OP's GM's "threat" of a mook conceding death less reasonable - they'd have to do it before the roll - and more reason for the table to reject it.
– MortimerGraves Jan 30 '13 at 22:26