Hey, where can I get peasants like that?

[Viking]

That`s what happens with loyalist revolts. I guess when that settlement revolted to WREs favour, the only intact building that could produce military units was the governor building, hence all the money the AI got for this purpose was spended on peasants. This works in the same way as in custom\MP battles, so the wealthier the settlements is, the more money it spend per unit(armor\weapon\experience upgrades).