The army loss penalty is something that should exist, but its something that can be fickle at times. Whether its for a defense of a siege battle, an island battle, or just making a video. It can find its way to be a deterrent and a killer of fun in these cases, as usually a recoverable battle or a cinematic moment can be removed before its climax just to be settled with a wall of text and your entire army being wiped. But while i don't condone its removal entirely how about a choice?
To either make it so the army loss penalty mechanic is toggle able in both multiplayer and campaign, or even filterable for the latter. As in settlement battles, islands, and march stance/ambush fights can choose if the army loss penalty can kick in or not. Or just across the board make it so the mechanic does not activate for either of the game modes.
For a place to activate it, obviously it should be in the start of the campaign, in the same area you choose your difficulty options, and the same for multiplayer within the advanced options in lobby.
I feel if people at least had the choice of discretion whether to use it or not could at least make a handful of people that much more enjoyed in the game, and hell if they liked it just leave it toggled on.