I have the same problem with a straight install of EB 1.2. My rendering error affects Kleruchoi (not Pezhetairoi even though they use the same model!) and the high LOD of the armoured horse. I tried copying and renaming the Pez model to Kleruchoi model, but the same render error occurs anyway. The Kleruchoi appear affected at all 3D levels of zoom, I think. Doesn't affect the game any other way though.