I would be interested to know what it's hoped this change will achieve. The EC has been thriving for a long time now on the continental war between the southern and northern blocs. Dwilight was stagnant for years before its 'bloc war' kicked off. I'm genuinely interested in what the perceived problem is with wars between large alliance blocs, and why it's thought it would be better to encourage wars between smaller alliances.
The problem is more with
peace with a large alliance bloc.
If there is a group of realms, that together make up enough of the continent that no possible coalition of the rest of the continent could hope to match them in strength, that creates a chilling effect on continental politics. Everyone else is essentially existing at the sufferance of the behemoth.
They may never exercise that power. Indeed, a given instance of this alliance situation may not necessarily give rise to the political situation I describe. But the possibility for it is completely unavoidable, in much the same way and for much the same reason that the threat of harsh punishment is implied when a ruler says, "I hope everyone logs in 10 minutes after turn change tonight to move to the battle."
Thus, for the same reason that the Inalienable Rights specify that even
mentioning them can be treated the same as if you explicitly stated "everyone who doesn't log in 10 minutes after turn change will be banished, and executed if caught," it was decided that the best way to deal with this problem was to create a hard limit in the code.
Unfortunately, that does create a necessary transition period, where things that are going on will get disrupted. That's completely unavoidable with a change of this nature.
Also, I wonder how the planned introduction of Hinterlands is going to work with this change. I thought the whole point of Hinterlands was to allow realms to control a larger number of outer regions and not be as bothered by the loss of hinterlands as opposed to fully productive regions. To me, it seems like Hinterlands and region-based restrictions on alliance blocs are going to work against each other.
Because the alliance restriction is based on percentage of human-owned regions on the continent, Hinterlands should not have any significant effect on it. None of these changes will in themselves change the
proportional military strength of realms relative to each other, so after Hinterlands goes live, I expect that there will be a brief period of expansion into rogue areas, with the overall proportions of the continent controlled by each realm holding roughly constant.