The idea was like this.
You have the option to commit crimes, if you do you get a bounty. Bounties start out country specific so you can flee Cimmeria to Stygia etc. Eventually bounties get high enough to cross country boundaries.
If you have a bounty a few things can happen.
1) Bounty hunters come after you and you fight and win, your bounty stays the same but they will come back stronger.
2) You bribe the bounty hunters by paying more than what your bounty is. Your bounty goes away.
3) You can't afford to pay the bounty, and dont want to fight or fail to fight the bounty hunters, you get put in jail. While in jail you have to do prison labor to work off your crimes. This is to prevent afk macroing or simply logging out to avoid the punishment. The punishment will scale based on the crimes and will be some forms of tedius gameplay, smacking rats with a stick, moving rocks, breaking rocks with a pickaxe etc, stuff that will force the player to be doing something albeit boring. It wont be so extreme as anyone will want to quit the game over it.
There might be rare chances to break out of Prison but your bounty wont be cleared in that case.