Climatic extreme events are expected to occur more frequently in the future, increasing the likelihood of unprecedented climate extremes (UCEs) or record-breaking events. UCEs, such as extreme heatwaves and droughts, substantially affect ecosystem stability and carbon cycling by increasing plant mortality and delaying ecosystem recovery. Quantitative knowledge of such effects is limited due to the paucity of experiments focusing on extreme climatic events beyond the range of historical experience. Here, we present a road map of how dynamic vegetation demographic models (VDMs) can be used to investigate hypotheses surrounding ecosystem responses to one type of UCE: unprecedented droughts. As a result of nonlinear ecosystem responses to UCEs that are qualitatively different from responses to milder extremes, we consider both biomass loss and recovery rates over time by reporting a time-integrated carbon loss as a result of UCE, relative to the absence of drought. Additionally, we explore how unprecedented droughts in combination with increasing atmospheric CO2 and/or temperature may affect ecosystem stability and carbon cycling. We explored these questions using simulations of pre-drought and post-drought conditions at well-studied forest sites using well-tested models (ED2 and LPJ-GUESS). The severity and patterns of biomass losses differed substantially between models. For example, biomass loss could be sensitive to either drought duration or drought intensity depending on the model approach. This is due to the models having different, but also plausible, representations of processes and interactions, highlighting the complicated variability of UCE impacts that still need to be narrowed down in models. Elevated atmospheric CO2 concentrations (eCO2) alone did not completely buffer the ecosystems from carbon losses during UCEs in the majority of our simulations. Our findings highlight the consequences of differences in process formulations and uncertainties in models, most notably related to availability in plant carbohydrate storage and the diversity of plant hydraulic schemes, in projecting potential ecosystem responses to UCEs. We provide a summary of the current state and role of many model processes that give way to different underlying hypotheses of plant responses to UCEs, reflecting knowledge gaps which in future studies could be tested with targeted field experiments and an iterative modeling-experimental conceptual framework.