They've been pretty thoroughly balanced. I haven't seen a Khuzait snowball in 2 or 3 updates.
In fact, I've seen them lose half their territory to the Asari and the Northern Empire in one playthrough. In my current game, they managed to expand into the Southern Empire, but lost all the cities they gained to rebellions - and those cities are now mine.
What you will find though, is like butterflies in Africa, player interactions can cause one faction or another to snowball by weakening their neighbours beyond what they're balanced for, and that might coincidentally be the Khuzaits sometimes, other times it might be Battanian or Vlandia or whoever. But because we've all been primed to think the Khuzaits always snowball, it doesn't take much for that cognitive bias to be confirmed when they do coincidentally take off...
Give it long enough and you might find they get beaten back in your playthrough as well. If they pass Debasement of The Currency you'll see their cities flip like it's going out of fashion.