When party leader dies the army just goes and does their own thing. There should be a way to make another clan member take over the party so you don't lose the troops. That or have them go to the nearest garrison or something.
I hate that they limit us with slots in any game but that is especially scary to think of happening. Ever get attach to the NPC for them to die and do that. Sounds like a horrible reminder, like a picture of your loved one passing next to the bill of the funeral cost in the bank statement.
I have been informed that this issue is fixed on our development branch and the fix will be implemented with the upcoming patches. Thanks for reporting!