In regards to that, I think the rock-paper-scissors element (cavalry-spears-swords), though not very realistic or true to history as @hruza
has interestingly pointed out, is essential and needs to be there IMO because of how much it adds to the complexity of tactics and allows for a party composition game beyond mass heavy cavalry.
EDIT: You do have a point where medieval combat and warfare is fun on its own without added fictional elements, but without a rock-paper-scissors element the party composition game would be simplified to the point of everybody having the same goal of massing the same "best" troop.
The main reason games use the rock-paper-scissor approach isn't because it works better, but because it's generally easier to implement than any sort of realistic battle logic. No need for clever tactics, when you have swords and the enemy has spears.
The rock-paper-scissor element at the moment does the opposite of "balancing". Spearmen are worthless, as even cavalry beats spearmen at the moment. Cav is simply unstoppable. Massing either cav or archers is just the way at the moment to win every battle, as archer sidearm weapons are as good as any infantry weapon, since almost no one uses any main weapons. As for infantry: the only use at the moment are shield + sword/axe/mace units, as they are basically only for blocking arrows / distracting enemies and shield + spear units just die too easily.
Basically the history teaches us, that weaponry reflects the armor usage, and vice versa. When someone wears poor armor, they will probably want a shield and a onehanded weapon. If a someone wears good armor, they will probably want a better weapon to be more effective on the offense.
If your opponent wears mail or thick linen armor, you want something that can penetrate that. And you will have difficulties doing that with slashing. To defeat those types of armor, you would either go for unprotected places, or use a piercing weapon (which are highly effective against those types of armor) or a blunt weapon. Since spears are much easier to use and much more effective in general, spears were the main choice of weapon in that period of time.
The true balance element that games should try to implement is: archers-cavalry-infantry. Archers beat anything while well protected. Cavalry beats anything unprotected (unprotected archers or flanks of infantry) while infantry beats cavalry and archers in a head on fight. A full cav party should be easily taken care of by a mix of infantry / archers. And friendly fire should definitely be a thing for any ranged combat.
And as for melee combat: weaponry should match armor usage, nothing else should be considered for "balancing" reasons. Any rebalancing just completly messes up how battles work, as they aren't 1vs1. A spearwall should beat most infantry compositions charging head on, which it absolutly doesn't at the moment. You can easily run down a spearwall with a bunch of archers in melee with their onehanded swords and no shield.
And while horse archers were one of the most effective type of warfare, they weren't in the way games portrait them, as you would attack and retreat with a horse archer army, and not attack and fight to the death, like in Bannerlord. Currently I'm thinking about removing horse archers entirely from the game, as they completely mess up the AI, as 5 horse archers can completely turn around an army and distract all archers, while the foot archers destroy the army from behind.