So, what were the differences compared to the Town of the Elves dragon? - In any case, we have a duplicate – either like the Town of the Elves or like the Dwarves.
If you don't like pegasi, then it would be more logical to keep unicorns. Since they "worship the earth," there should be a minimum of flying units. In Magic: the Gathering, where a similar concept is used, the "green" faction generally has the most powerful warriors, but also a general weakness: a complete lack of flying units or their low quality. And phoenixes and... the earth... it's a bit strange.
And the pegasi from Heroes 3 are a very interesting unit. Many players underestimate them, but they are one of the top units in skilled hands when used correctly with speed – a situation similar to ifrits and dragonflies. In general, the disappearance of top-tier ifrits, pegasi, and dragonflies (zmiys) is, in my opinion, a very significant loss for the 5th installment.