AI factions should be dissolved if they have held no fiefs for ten days. All their clans should then instantly either defect to other factions, or go "into exile" (disappear), like they did in Warband.
Chasing down the scrappy remnants of a faction all over the world just so they stop endlessly raiding your villages isn't fun when you have other **** to do (fight remaining large factions which are still a real threat). It just becomes an annoyance.
Normally their parties are too small and fast to catch, and because of a broken peace system, they will demand tribute from you rather than offer to pay it, no matter how badly you are beating them. So you either pay money in tribute or lose money in taxes- either way you're paying for being the winner! Or you could execute their parties but then everyone around the world will hate you and see you as dishonourable devious scum!
And they also get endless mercenary clan parties to spam at you, which for some reason they don't have to pay. And they can recruit armies from YOUR fiefs to keep attacking you once in a while as well, despite the fact they should have no source of funds left to recruit from.
It makes no sense that a kingdom can have no source of income whatsoever left and yet still have the means to constantly pay armies to attack you, and all their nobles will happily follow the ruling clan (who has absolutely nothing to offer them) for eternity in failed attack after failed attack against a behemoth they will never defeat.
They should just break up.