I'm going to honestly say that I do not understand the problem with removing the penalties here... I can find some reasonable logic here:
I would like to say, if you are at friendly land, morale loss should be much smaller. So you could travel long distance as long as you were on friendly zone, but going deep on enemy lands could cause more major morale loss. It would be realistic to think that if you are deep in enemy lands, fear to being cutoff and sacked causes more morale loss. Sitting at friendly city, even thought far from home, should let the morale raise a bit, cuase fear of being slaughtered aint there.
But even taking that into account, aren't mercenaries expected to don't give a !@#$ about anything but gold?
