Regarding subjugation. In the last mission of the last campaign of the Hammers of Fate, in the battle with Biara, I noticed that with arcane sight, subjugation does NOT reduce initiative.
Regarding mass spells. No one prevents you from reaching level 25 or visiting witch huts.
And now, for the knight enthusiast. Task: A mage with level 23 and a super ability is in a castle. What level should the knight be to defeat the mage (with an equal number of troops)?