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Flank Morale Modifier - getting shot in the rear has an effect
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My understanding of the Flank Morale Modifier option is that friendly units on each flank increase a unit's morale by 1 level. This encourages solid lines rather than alternate hex defense.
I play with all options except isolation and retire by prolongue.
I don't play with isolation because historically a lot of times surrounded units continued fighting ferociously. This rule has necessitated the creation of an artificial device in the game known as a supply source. I have played for awhile now without the use of this rule and consider the game experience to be superior to when I did use it.
The only reason I don't use retire by prolongue is that the unit disrupts when it backs up. I can find no historical reason for this. Sometimes when I am moving units down the road they will drag an artillery unit back and disrupt it. This is an annoyance I can do without. If the unit did not disrupt, I would probably live with this annoyance for the sake of the little bit of historical accuracy the rule provides.