Thinking about the test I did, I guess I understand that hitting 'escape 'and 'exit battle' should never be of benefit to the player or you could always do this if a battle went bad, so I guess making you lose the battle with some casualties is not so bad... Ideally I think performing this action in a normal battle should force the battle to be autoresolved from this point, but well...

But I find the logic behind withdrawing really odd, you withdraw your troops from a battle in good order and they all just vanish, I understand the fact that you effectively lose the battle, but how can an large, intact and in good order army simply disappear!?!?... I would love to see the logic documented...

Personally I think that withdrawing army should just move back a space or two and if it can not withdraw because there is no space (back against the mountains or the sea with no ships waiting) then it may be fair that the army is lost, but perhaps in that case the withdraw option should be disabled for the battle....

I wonder if withdrawing is only this devistating for the attacking player???