Shattered retreat is only partially disabled

[Rostan]

Even though in battles now there are more causalties they give more warscore than they gave before. The system was introduced so that the defeder could have some opportunity of resistance even after losing a battle. Normally in medieval battles the losing army was not anihilated.

That is true. They also did not stay in the field after losing, especially the peasant levies.

 

[Hecaton]

It probably wouldn't be too hard for the devs to add an option to the rule which would increase casualty rate.

It wouldn't, but it's unlikely to happen. With how emphatic they were about 'Shattered Retreat is how the game works now, deal with it' when the feature was implemented I'm honestly shocked they allowed the feature to be tweaked in the game options.

And it makes battles easier for larger realms... if you outnumber your opponents but lose due to random fate, you likely can come back at it with the reduced casualties system. Reduced casualties makes combat less 'spiky' and makes wars harder to win if you're at a numerical disadvantage.