Never happen.
Was going to leave it at that but let's break it down to why, again, for the umteenth time.
1. Latency. Single player games like skyriim don't have to worry about this at all. You're however playing an mmo where latency and lag have to be taken into consideration.
2. Ever play a shooter where you see people purposely throttling back connection so they rubberband and lag on purpose?
3. Unlimited magic means you also have to have unlimited stamina for stamina builds which then turns into unlimited blocking, unlimited healing and unlimited boredom.
4. If every single creature and player in the ENTIRE game had one hit box for head, one for body, one for each arm and one for each leg that is a crap ton of information to load and track. Once again, latency.
5. Some shooters do some of this, but most shooters are small mapped arenas, they're not maps the size of Cyrodiil.
People have been asking this question for 2 years now. Same answer: won't happen. You can't have single player physics and mechanics 100% overlaid into an MMO space.