it would be really nifty if only units that have a banner show one on the battlefield. It would give players something "tangible" for buying a banner, and it simply makes sense. But the feature is so cool that this is not really the important point.
I'm really very resistant to this. I think that the important thing here is
not anything related to the paraphernalia item, but the indication that I believe
all units in such a milieu would have of what army they belong to. It's meant to aid in promoting the camaraderie that goes along with being part of a particular army, and in indicating, at a glance, who each line in the report is talking about. It can be very difficult to keep track by unit names of which side any given unit in a battle is on; the banners should make that vastly easier.
I agree that it would be nifty to have
some additional indicator of who has banners, and, indeed, who has siege engines. Perhaps there should be some additional tiny icons made for those?