Wicc
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According to the rules, if a stalemate situation arises, for example, one dragonfly runs away from 100 gnomes (they can't catch it), then the attacker retreats, meaning the gnomes, although they can't be killed, leave after paying a fee. This method was used against thousands of skeletons; fast units were killed, and, for example, one angel would fly away from 1000 skeletons.
In our situation, there probably wasn't a stalemate because, thanks to morale, it triggered every 20 rounds. Two dryads gradually killed 7 fairies. Simply, this attack and the unwillingness to retreat didn't affect the game in any way. Perhaps a time limit should be introduced for such situations, for example, no more than 20 minutes; otherwise, you can wait for morale for hours and ruin the game...
In case of disputes about whether morale will help or not, the check is very simple: constant morale is simulated by giving the pursuing side two turns in a row (morale triggers are skipped), meaning the fleeing side skips turns every other turn.