[Jasper]

Indeed. Plausible, simple to implement, and doesn't require extending the user interface.

I have my doubts on how it might affect 0-encumberance troops as well, and no trick comes to mind to alleviate them. Perhaps it's not so bad if such troops get a bonus in rough terrain? It's certainly thematic.

Not applying this penalty to commanders might help, so as not to penalize mages which often an effective counter to 0-enc units.