Good Lord, smas, there is a pause function endemic to the KOTOR battle system. Keep saying that all you like, but I have to say it is a weird opinon. Any reasonable analysis of that system will soon see how useless it would be for multiplay. Quite why anyone would like such a broken system is beyond me too; it was one of the game's faults (and indeed led to them making a new one, which I understand is considered much better, for Jade Empire). All you did in KOTOR was load up on damage and pick flurry or load up on force and spam lightning; that killed every foe you ever met with no challenge. That is a long, long way from the definition of a good system.
Broken systems can hang around in single player games because people can be self-absorbed enough- destroying everything they meet with no contest, not to care, though that is a great shame. In multiplayer it would never, EVER do, for obvious reasons.