If it's capped at one unit per player per turn then we don't have to worry about the replacement rate, right? There's a trick to mercenary recruitment everyone should know about; if you disband a partial unit in it's usual recruitment zone (And outside a settlement) then next year there will be a full company of that same merc available (In vanilla anyway, not tested in LTC). This makes common sense but I've found people to be surprised that things work that way. There are a few circumstances where this can be useful as opposed to retraining the mercs in a settlement.

Now, would merc recruitment by participants be first come, first serve?