I concur, looters and bandits should not spawn at random and scale up with player level.
However, I could see the spawning tied to certain situations:
- Province has food shortages -> spawn looters
- Villages were looted -> spawn looters
- low Securitiy -> spawn bandits
- large army defeated -> spawn deserters
- there is a hideout in the province -> spawn parties but do not tie them to player level. Upgrade troops if parties are successful and hideout 'wealth' rises
- high prosperity -> spawn Bandits (are attracted by wealth to steal), but remove looter parties (finding work is better to losing life while forcing breadcrumbs out of traders)
Player interaction could also influence this a bit
- visit a hideout and give the bandits money and gear -> spawn units but have truce with this hideout and its parties. Train roguery skill
- have city crimelord give task 'create hideout' -> gather some equipment and men to found a new hideout in province. Result: train roguery, have truce with their bandits, get % of loot. While mission is open you have additional talk option when encountering bandit/looter parties "recruit for hideout". Merchants may not like you for this, if they get wind of it.
- with the right roguery skill you may found hideouts yourself - like a small castle to manage. You are a bandit king after all, aren't you?
- Negotiate truce with bandit parties (Bribe with money to be 'protected' instead).
I always wondered, why the hideout leaders are so generic. Why not have rogue NPCs that could be recruited after defeating them or tie the number of hideouts to number of NPCs doing roguery. Looters and Bandits should be a meaningful part of the game and not just XP-fodder that becomes annoying in the long run. Bring back the Manhunters if there are many looters/bandits in a region.