The AI behaves normally in battle if you remove the dodge mechanic; the behavior is the same as before. I turned it off in advance because it ruined many games.
The Knights of Death are not overpowered at all; disabling the War Fury rune is also not overpowered – for it to work properly, you need to first apply the Berserk rune and somehow gather the enemies together, as the Dwarves hit weakly.
I haven’t checked the machines; perhaps they should all be given out at the end, so you don’t have to click around in the forge. And regarding the Castle, it could be like a random arena, where the defender gets a -20% army bonus in exchange for the Castle; the Castle would be a randomly built one.
Also, if you think about it, spell guilds are very useful; the library at level 20 is very helpful (without it, Dark Elves couldn’t level up Darkness or Summoning) – collecting stats is a routine task of running around the same places