I can't help but laugh at people citing historical accuracy as a reason to have all units wear muted brown colours. Real medieval people wore some pretty egregious colours by modern standards.
I think having colour coded attire is a fantastic option, which even at it's most garish (the fully coloured recruits are a tad too much for my poor poor eyes) isn't nearly as bad as having floating orbs of identification above unit's heads. I'd actually welcome this feature being expanded on in order to fully replace the latter.
Again though, the recruits are pretty bad. Maybe just have them wear a sash or something? Or have the colours be more pale, washed out, muted and muddy, as befits peasants, and giving off an impression of white clothes recently half-heartedly painted a certain colour.
Somewhat related, but would anyone be interested in a poll about the uniform lord banners? For a game called bannerlord, the banners are somewhat underwelming. I expected faction banners and family banners and personal banners, but instead there's just the one per faction with a slight variant. I understand the wish for simplicity, but I disagree about it's implementation. Mainly, having uniform colours and styles is just as likely to confuse as the alternative, as players won't have easily distinguishable banners to associate with a specific person. Perhaps an alternative solution would be for lords to fly both their own and their faction's banners? Not quite sure about that, but I beg of you TW, at least give us an option to choose between uniform and distinct banners (though this should be somewhat trivial to mod in, what would not be so would be the banner designer, so at least let that be part of the main game pretty please). As for the lack of personal banners (think of brynden 'blackfish' tully from GoT), that's a shame, and I think it'd be a really great feature, but it's not that much of a loss. I'd settle for bringing back personal renown alongside family renown on that front.