Uhm , the game defo detects the terrain. Forests 100% works at least , i've noticed this 1000 times and it's also visible in the party speed icon..
The penalty is pretty nasty , 1.2+ speed reduction or something. Not sure about snows - i don't spend much time north of the wall : DDD
Think culture background fit the race concept really well , but battania/khuzait and styrgia need a significant boost. And yes , khuzait certainly works.