Dunno, I assign titles based on the acumen of an individual, thus they all get them knights and peasants I they are smart enough (except when the title is associated with a command bonus, than usually a higher ranking general gets it even if he is completely dumb). I never got any negative feedback from the game on this nor any noble's mutinies. I also wonder, maybe a guy that is leading even a peasant unit is some kind of a lesser noble?