Yeah, I discovered this while reforming my main kataphract recruiting centre. Once I built the "settled aristocracy" I didn't have access to them anymore. Luckily I had expected something along those lines (although I must admit I wasn't prepared not to be able to recruit anything at all there) and had recruited a solid force of armoured horse-archers prior to doing this!
I'm not sure if the process is worth it most of the time. Maybe only in the larger cities. I think I'll stick to the traditional "nomadism" or "pastoralism" in most settlements.
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