I thought "fight to the death" basically just means that the unit is broken but cannot rout as it is trapped in combat, and the troops hardly cause any more casualties then anyway. Or should I understand that you want the units to be tougher to break in the first place? Cos if so then is that not just a function of morale? The balance seems about right in EB1 in that case.

In M2TW you get those massive routs because cavalry charges are so ridiculously overpowered and can take down 50% of a unit in 2 seconds or less. With other morale bonuses thrown in such as having killed opposition general, attacking from rear, nearby troops routing, exhausted etc then yes, the whole line just melts. It doesnt help that militia troops have very low morale values either.

Im pretty confident that in real life troops running away (and subsequently rallying) was much more common than represented in the game, but with the limitations of the TW engine, especially re casualties for the routers and the inability of the AI to hold a proper line in the first place, the system used in EB1 seems like a good bet.

btw, in M2TW when chasing down routers they drop dead if a horse even breathes on them. Is it possible to make the cowards harder to kill?