My personal opinion on this is it doesn't make sense to me that combat specifically between AI has to be subjected to the same level of physics collision reliance as the player. The player is the only one who appreciates the feedback from a heavily physics dependent combat resolution.
I feel like combat resolution between AI fighting could be made to use less physics/collision/hitbox reliance, and add a bit more CRPG style hit%, block% crit% auto-attack/ autoblock fighting when fighting amongst themselves, with values derived from troop stats, especially since physics is already particularly janky and makes agents shuffle and bounce around in mob situations, and collision being such a mess, creating for a very chaotic and inconsistent melee combat simulation. It will also remove the need for every single AI to constantly track its movement vectors vs target projected vectors, attack/block direction, attack animation timing calculations, and predictions. AI simply gets in range to target enemy AI, makes correct facing and distance adjustment, makes attack/defense rolls, resolved and reflected through a bit of movement and animation.
How much does it matter what goes on under the hood for resolution between AI fighting, when player won't see most of it in a large battle, since we're too busy fighting ourselves or giving orders while focusing more on troop formations and position anyway. I'd care more that my elite infantry is holding the line while fighting and defending effectively and my cavalry lancing enemy archers reliably, but it's hard to make the AI be reliable while subjecting it to a very unreliable mob physics, messing up its calculations with a slight bump, bad collision or a minor shuffle.
Perhaps the physics collision-based combat resolution could only apply to player (when striking at an AI agent) and AI targeting the player, where the impact and feedback of it matters.
If the overhaul you propose were to be implemented i think more people would be unhappy than happy with it, since the main issue is not the battle results from the current bad AI behaviour, but rather the behaviour itself. M&B has always been about proper simulationism not approximate simulationism like titles such as Rome Total War etc. Currently the reason we are critiquing this behaviour is that its both broken
and leads to inaccurate/wrong losses and victories. It is not that we only want battles to be made more realistic in their results and how what sort of troops interact when fighting, but also that the process by which we get there also be fun and
at least to the standard as the previous game. Since currently i think if TW were to make it so that combat would feel about the same as in WB then most people would be satisfied to some extent. Also would you keep this system separate when in "small" battles, such as attacking a hideout with a few men or would you keep it the same there? If you would change the system depending on the battle size, what is your line in the sand in terms of what constitutes a "small" or "large" battle. We would also have to think about how this affects tournaments since those are another part of the game where you cannot avoid having "small" battles where AI v AI will happen. Another thing i want to point out, but one that im not that sure on, is that it would probably take more money/time/man-hours to revamp this whole system into a new one rather than fixing the currently existing one. There is one aspect to this that i personally don't know enough about to know how it would work out, but how would projectiles (arrows, bolts, javelins, stones etc.) be treated in this, is there just a 75% chance that your low-mid tier soldier has their shield up and can block it or is it just a 100% block rate if they do have it up? Also how would shield health work in this situation with the blocks/misses from the opponent, since currently shield health only goes down if you miss the character, but hit the shield, would there need to be a calculation for "this person did not hit so now we need to do a calculation to see if they hit the shield or missed entirely". Also how would you make the mounted combat work in this proposed system when it comes to speed modifiers since currently even if you are going at someone at a high speed you still need to angle your weapon properly or you wont do much damage, how would you work that into a %chance rolling system without still needing to simulate out the angles, speed, change of angle etc.?
One more thing to point out would also be that either in small battles or events (such as thug/gang fights in cities) this would make the players tactical decision making moot, since even if you position your troops well there still is just an X% chance that the enemy get lucky and win rather than fulling simulating the battle out how its supposed to be.
Also in this proposed system there is much more of a chance for "unrealistic" things to happen, such as a peasant getting lucky with their rolls on the % chance to do certain combat actions and them beating up a much higher tier unit. Whilst in the current system it is
almost impossible for that to happen excluding outside factors such as: the higher tier unit being heavily damaged from a previous fight, them looking in a different direction because they are paying attention to another unit or anything else like that.
To reiterate on this one point, its not that people want the results of the battle to be logical and they don't care by what means we get there, but rather that this simulationist style of going through a battle is a core element of the M&B experience and currently in this entry to the franchise it is broken and needs addressing.
So yes, most M&B players
do care about what "goes on under the hood" since that is not just a function of the game that leads to the fun, for a lot if not the majority of the players that
is the fun. Fighting in battles, seeing fights go on around you, having theses fights last for more than 2 minutes and also knowing that in terms of whats going on around its not some "RNG fest", but rather a "properly" simulated battle (to whatever extent you can simulate a battle like this, but thats a different discussion for another time) and also knowing that their tactics in terms of even the most minute troop placement matters.
So overall whilst the proposed system is a good one for other games i think that it is not fit for a M&B game and it would be better to just fix the current system rather than making an entirely new one and possibly alienating a lot of the more dedicated player base.