Hello nafod!
I find retraining to be particularly useful when it comes to quickly replace your losses. You can bring as many low-manpower units up to full strength in a single turn as you can fit in the recruitment queue. Merging them and recruiting new units one at a time to replenish the army would take much longer. When you are on a timetable (senate mission), that can be decisive.
By the way, I am talking only about Rome. I believe it worked differently in Shogun, but I have not played that game in while.
Verrucosus
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