In short, decapitation means you get to keep your stuff after your commander dies, but if all commanders on your team die, it's game over. Decapitation is currently an unrated mod.
I think it should be rated, or even better, just integrated into the game as an alternate victory condition - that would mean games using it don't show up as modded, and since the option to show modded games is off by default, the games would have higher visibility. As long , of course, as there are no glaring balance issues (discuss), and as long as that's not too much work for the Game development team.
Why should it be rated? It's a better option than fullshare for casual team games with wide rating distributions, and it's a better option overall than Annihilation or Supremacy, because the cleanup required with those is tedious and meaningless. Right now, in fullshare, people have to actively avoid killing an 800 if they've got a 1600 on their team ready to take over their economy. It might, although this remains to be seen, also encourage new players to be a bit more adventurous with their commanders, which is, in my opinion, a good thing, since making best use of their com is something they learn pretty slowly, with experimentation being very expensive (you die).
As far as I can tell, the benefits outweigh potential problems with this game mode, one of which might be com bombing by high rated players. I believe this is so rarely encountered that people haven't figured out how to mitigate it at the t1 stage, when t2 transports aren't available yet. It's also not something I think is that easy to abuse in order to farm rating. A decision to make it rated could also be reversed at any time, should com bombing or anything else prove to be a big enough problem.