Is this assimilation mechanic only for Kingdoms, or can duchies assimilate counties and empires assimilate kingdoms? I think empires should at least be able to lose kingdoms that exist separate from the empire for a long time. For example, a Kingdom of Sicily that gets formed and remains outside the Byzantine Empire for a hundred years should no longer be a de jure part of it.
It seems reasonably clear (at least to my reading of it) that the new mechanic is only for the Kingdom-Duchy relationship. However, Empires could end up assimilating Kingdoms by simply assimilating each individual duchy (that's my own extrapolation based on how I understand the unification of Spain will work anyway). I can't see how duchies could end up assimilating counties with what's been written thus far. I'm not sure about the Byzantine empire losing duchies in the example you describe. I think it would depend on whether the Byzantine empire's de jure hold of the kingdom was by duchy or by kingdom. Hopefully it's the former but I've a sneaking suspicion that it's not. Still, here's hoping.
"Frisia, Lotharingia, Bavaria, Pomerania, Aquitaine and Britanny are now de jure kingdoms from 1066" that I think is going to be one of the game-changers. Unless I miss my mark every Duke in those de jure Kingdoms is going to be scheming for those thrones and that should drastically reduce the strength of France and the HRE. I really hope I'm right about that - Dev confirmation would be awesome btw.
"An interesting mechanic change is that a kingdom can only be created if you are already a king or emperor, OR you hold more than one duchy title. After all, who would respect a mere duke claiming to be a king."
That could work against the previous feature in terms of toning down France, HRE etc. but it makes an awful lot of sense and might prevent numerous ineffectual tries for the throne. My guess is that it was put in place to do precisely that.
All in all, this is looking like an amazing patch. Best yet there's
more to come! A big thank you to the Dev team is due I think.
Edit:
Can titular titles assimilate territories too, thereby becoming non-titular?
If we follow Balor's words strictly, the answer would appear to be no. "The first feature of this concept is the fact that duchies can now be assimilated into
another de-jure kingdom."