Ultimately, Retsu survives but loses the battle.
.
Usually, Baki never actively fights with anybody weaker than him and has no desire to hurt any of the thugs that constantly try to attack him.
This aspect of his personality is short-lived, though, as by the end of Baki the Grappler, Baki becomes his kind, laid-back self again while still trying to surpass Yuujiro.
However, it adapts the arc of the same name from the second manga series, which is titled simply Baki.
Baki fought one of the escaped convicts, , and won easily by smashing his nuts.