It disables the Trainer and Surgery skills.
You also cannot recruit from a village normally. You have to conscript them as a hostile action, getting 10 villagers but losing 10 relations with the village. Then you have to bring up the relation to at least 0 before you can conscript again.
Long term wound system, where you suffer attribute loss for a period of time.
That's as far as I know. And that is enough for me to turn it off. The game is hard enough as it is with minimum 20+ brigands roaming.