You are not fighting some dude. You are fighting your cousin.
If he looks at your peace proposal and says "I'm hungry, have that wench make some chicken," you don't really have a choice to be have said wench make said chicken.
A cease-fire of some sort is realistic. The AI taking over while you are captured is realistic. 50% warscore is realistic. But your knights aren't gonna jeopardize your life by turning over their castles until they know this is an agreement you support personally.