I’ve never punished a player but I’m always use extremely consequent with the game setup, so I haven’t any kind of mercy and I’ve never change my occult rolls to save a character’s live or the final result of a gaming session. I know some masters recommend not doing it and that it’s better to change or to ignore the result of hidden rolls to keep the rhythm, the fun or the climatic situation. But as a player, I would feel myself swindled I would know that in the critical moment of the game, a deciding action of my character or a risky situation was not so deciding or so risky because the master has decided a happy ending in advance. Of course, it’s always my opinion.
And following with this principle, the cruelest end of a group of players in gaming session was the conclusion of the longest campaign I’ve ever run. The characters didn’t die, but for them the final was worst than dying. The game was Traveller and, near the end of the campaign (the final fate of the human race was at stake, of course
) one of the main bad guys, an alien infiltrated as a head of an important intelligence agency, manipulated their minds, changing their memories and sending the characters, back home. They arrived safely to their homeworlds, at time for the End, happy and ignorant of what was about to come. Of course, the players knew it… A sad end of end epic campaign with a lot of great adventures…