Again, what late-game balance?
This is not an objection of 'everything is unbalanced, so it's not worth trying.' This is a fundamental of question of what 'late-game balance' is supposed to mean. You are raising 'late-game' balance as if it's a goal, but without making a case of what it means without functionally breaking most of the premise of strategy games.
Pretty much every strategy game works on a premise of growth feeding growth, and the ability to take away someone else's assets, until a point that one party or another gets runaway advantages. Once this critical mass, the winning party is going to dominate, and the more they dominate the more they can dominate. The reason the average chess game only lasts 40 turns is because by that point both parties are agreed that match is hopelessly lopsided in the late game.
This is fundamentally not a balanced result. It is also not a problem. What you are seeing by the end-game is whether someone is 'winning.' Winning is the point.
And this disparity gets even bigger when actual economic growth factors in. Economic growth strategies are often exponential- the increase in growth accelerates the potential increase in growth, allowing further investments. This isn't quite as true in CK as in other paradox games, but it absolutely does apply- you go to war to get more income that you can invest in the resources for more war and more income buildings which bring in more income which-
Jumping to the extreme late-game, functionally post-game, of a strategey game and going 'this doesn't seem balanced' is presupposing that it is supposed to be balanced at that point. It's not. You don't try to balance chess around what you can get to at turn 60.
Strategy games are balanced around their openings, not their end-games. The end-games are expected to be unbalanced.
So when you say 'late-game balance'... what late-game balance?
Particularly when knight-effectiveness is a tall-empire power fantasy, and removing it just moves power to big blobs with more forces, which would be inherently unbalanced against smaller blobs with fewer forces?
Furthermore, from a realism standpoint, the idea of three knights defeating an army of 13,733 is simply unrealistic.
Realistically, how often are you seeing the AI or your multiplayer competitors pursue 2017% knight effectiveness?
If you want to argue on the basis of realism, the premise that a player in the medieval era has real-time knowledge of the world map, can send messages across the Eurasian continent at light speed, and that the average 21st century hobbiest would be any good at medieval politics. The question is not if it is realistic. The question is whether it lets the game be fun.
There are absolutely people who find space-marine-knight concepts fun. They like the ability to out-punch their empire size. It was a much-requested aspect of the CK2 combat system, where levies and retinues both scaled by empire size, and so the map inevitably turned into blob-fests where you blobbed or your got outmassed. It wasn't hard to blob, and if you did blob it wasn't hard to keep beating the AI. But it was a playstyle plenty of people didn't find fun, because they didn't want to paint the map to survive, or swear fealty and be a vassal, or be conquered. Disproportionate power could let them avoid all of that, even as it offered another way of military domination that was already possible.
For the people for whom space marine knights aren't fun... again, this goes into the nature of a self-inflicted problem.
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