All of this brings us back to: A core feature of this game is the limited space. You must very carefully plan your cities growth or else you end up stuck and forced to delete buildings. People who hate this feature quit quickly and go play a nice city builder that has a warehouse where they can store buildings while they re-arrange. This game has no warehouse because, haha, core feature. That is one of the things that very much sets this game apart from other city building games. You can buy your way out of it, but you can no longer roll over it by endlessly conquering provinces.
You can still fight battles in the tournaments, they run regularly. But expanding your city rapidly by rolling over provinces as fast as possible is no longer an option. You are not being punished, inno is simply enhancing and enforcing a core feature of the game.
They did this by implementing a progressive battle update which is actually a great deal of fun. You will never have fun with it, outside of tournaments, if you keep negotiating provinces. There are many people stuck in your position, ahead of where they should be, and that sucks for them. But if you keep pushing out you will never really get to try the new system. The progressive difficulty is really not as much fun to play with in the tournaments due to the tiny squad sizes. But at least you can play around with the battle pentagon and practice with troop combos.