600 men is a small army. I don't mean to say that it's a bad army, just that it's on the smallish side. It's normal for small realm to have small armies; with such a proposal a small realm that succeed in luring its bigger enemy to a mountain region would have a better chance.
Your exemple of Arcaea is also a good example. That was a small (for Arcaea) specialized force of high-end troops. The proposal is exactly aimed at giving more tactical advantage to such armies instead of the big blobs.
No, the big blobs still have a place in the rurals. It just beans that the big blob will not be effective everywhere.