Well I guess it kind of is an exploit.. but if you think about it if you ascended far enough away from the AI army they have no effective counter except to run away and avoid engagement.
Still, I'd imagine it would be interesting to try to slog up hill and defeat the army head on. Going to be tough with my 12 unit armies though, since I usually use regular line infantry rather than elite infantry units. They would break before I could effectively flank or do much of anything really.
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