Thanks for the relations suggestions and reasoning behind them. I agree with your suggestion for the lute quest relation penalty, and I’ll consider the others further as well.
On bandit lairs: Your tweak is definitely more realistic, but then I’d worry about the bandit lairs being too easy. Unfortunately, I tried to adjust bandit lair enemy size and reinforcment rates in a previous beta, and too much seems hardcoded so it ended up with glitches, so I had to revert those changes, so no possibility of making the lairs harder to compensate. I did make loot fairer though, given the party limit Balance Mod caps the player army loot shares for bandit lairs at 6 men and the player shares (ie, whereas in vanilla if you bring 100 man army in your party size all 100 get a loot share even though only 6 fight in the battle, in Balance Mod the player always gets the same large amount of loot regardless of his army being 6 or 600, since troop shares are capped).
On farmstead: Agreed it is weird how sometimes the player wanders into obvious ambushes. I imagine the bandits would hide rather than attack were an army to approach though, and from a gameplay perspective bringing an entire army can kind of trivialize the encounter. Same as with the bandit lairs, it is maintaining balance with an “arbitrary headcount limit” https://tvtropes.org/pmwiki/pmwiki.php/Main/ArbitraryHeadcountLimit . I think it is a completely sensible personal decision to favor realism first and remove such limits, but in the mod I tend to prioritize balance over realism when they conflict.
