As someone who doesn't fight, but does think she understands what they're talking about, with the lower squad sizes, an attack that would wipe out a fraction of a squad wouldn't wipe out anything, because it was rounded down. So if you had six squads, and lost 1.5 squads, you would have five squads worth of hitting power to hit enemies with because you would only lose one squad. But when you double that, you have twelve squads, and lose 3 squads, and since there's no rounding, you end up with nine squads of hitting power, which is 3/4 the original hitting power, rather than the 5/6 you had with the rounding down of the half a squad. It's not much, but I'm assuming the players who are interested in combat want every edge they can possibly get.
If the "explanation" is going to be simply the devs saying this is "necessary to ensure the game is balanced moving forward" then I have to say, don't even bother putting it in the InnoTV episode. It's at the point where when I hear that, my brain inserts "this is necessary to force you to give us money" because they never offer adequate explanations of what, EXACTLY, about it they're trying to balance, and leave the players to assume that the only thing that's being balanced is diamond sales.
Because seriously. The goods cost for my beta city's tournament participation is so high now that the buildings Inno requires me to place (Magic Academy, Training Grounds) that do nothing for me are interfering with my ability to participate in tournaments, because I can't place more manufactories when my goods cost went through the roof... and I'm worried my fellowship will kick me out for not participating because participating is impossible. This is absolutely not balanced. There is not enough space in my city for it to be balanced, because now tournaments take ten times as many goods, but my space to place buildings to get the goods has not increased, and has in fact been slowly shrunk as Inno releases more new buildings in older chapters.
If their plan was to increase the production of manufactories at some later date, to keep it balanced, my response to that is... um. Multiple words which are not appropriate to this forum, because releasing an update that horribly unbalances things with the promise of a future patch to make it balanced again guarantees that people will quit in response to the unbalancing and not stick around for the rebalancing. That is disgusting. Yes, disgusting. Disgusting is the closest word I can think of to my thoughts on the matter, if the devs announce that this change takes into account future changes that haven't been made yet. It isn't workable. If there's another part that's supposed to work together with this part and it hasn't been released yet, this patch should not be released until the other part can be released with it.
I am completely certain that if there are other patches which counteract the tenfold increase in goods that most people are experiencing, the people on live would be overjoyed to wait multiple weeks for this patch to come out, so it can include the future patches that will fix it, rather than experience this half finished thing as it is now. It jsut doesn't work.
For comparison, my alt city in DWARVES on live has much less than half the catering cost of my beta alt city (fifty of a resource maximum in each encounter compared to 300 maximum in the first province, first round)! The beta alt city is in ACT FOUR.