I think miotas meant that the silver star general has the same kind of permanent mini-morale-boost that any unit with the "inspires nearby troops" has - like when troops near a first cohort unit get "happy to be near a command unit".
As for the rally ability - in my own experiences it does bugger all to stop routing troops, but does stabilise non-routing troops - as Cullhwch says - it bumps up the morale status for a short time
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