That would make the hero pretty much the class to be then if they had an option for an absolutely risk-free battle, while no one else does.
Look, each class has its perks and fails. For example, if you want a small, fast raiding force, you really wouldn't want to play a cavalier. If you don't like dying, then probably hero isn't your first choice. The statistics page shows clearly that Hero is the second most prevalent subclass, second to (none). This may partially be due to the fact that you can't get out of that subclass. But if people really didn't like it, they now have the option quite easily to pause or delete the character.
A closer look at some large realms would also give an idea about people's views on heroes. How many active heroes are in the realm? My estimate would be that they constitute the largest subclass other than (none) in most large realms of 50+ nobles.
But more to the point of the hero change: The penalty to unit performance would have to be rather severe otherwise I can imagine that almost no hero would choose to risk capture, wounds, or death, for completely reasonable and intelligent practical reasons. Obviously you wouldn't risk your ability to lead your unit if the incentive against doing so wasn't strong enough. And in terms of H/P, a hero needs 10 P to get the class, and a Warrior mainclass with 10 H can still field around 30 non-cavalry, non-SF. Of course, it is virtually impossible that a hero would have 10 H, so a conservative estimate would put around 50 non-cavalry, non-SF. It's not really a big deal to gain no H/P, since most people can't support anything larger than 50 high quality men anyway.
Also, the benefits are pretty good, and the risk, as long as you are good at estimating your chances, aren't so bad. Fielding archers with minimal retreat is a good conservative strategy. Heck, I made it through 4th Inv as a hero fighting against monsters, and I was there when the mortality code was still berserk.
Think about it: Escape from prison option every turn, telling tales to improve loyalty and morale, even picking up volunteers in some regions. Resting your troops also gets more effective (possibly. It gives a different flavor text at least). Those are some pretty good perks for a rather small price of death. And locking your subclass, but eh, not sure why that would make too much difference unless you want that character to one day start writing treaties or something. In that case...plan ahead.
