Carthage can actually build pretty high level regional barracks with even a level 2, in Iberia (represents their heavy use of Iberian regionals, I believe).
If the level 5 MIC doesn't give any new units or other bonuses, I don't see why you couldn't just keep them when switching to type 3. I think some people also just stopping recruiting the level 5 available troops (if there are any) when they switch.
As far as exploits I think the AI just automatically gets the "best" (lowest number) MIC they can build in a province when they conquer it, so their governments are often not optimal. So even those of us who are careful about not taking advantage of switching government still have a leg up on the AI whenever we build a level four to get great regional troops in such and such province (although that's an AI issue, not an exploit...).![]()
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