It significantly shifts the balance.
I played one mission with huge armies. I amassed an army of 150 priests, 500 shooters, 400 warriors (they were often defeated), and 200 bears (divided into two squads) + a light mage hero with a
Ballista dealing 2000 damage. Once, I encountered an army of 200 titans. I used both bear squads to cast the Energy Rune and stun the titans, because with seven cells before the attack and the Soldier's Luck skill, it's an 88% chance of stunning, plus mass acceleration, so the titans simply didn't attack at all.
And neutral creatures can be defeated in various ways; their task is to put up a good fight and show the player how strong they are.