Hmmm... But there's two things left to discuss: Realism and risk/reward system.
Realism: It doesn't make any sense, that if you have the intention of killing everyone in a particular area or just anyone, that you could not tell your followers to do so as well.
Risk/reward: Merc leaders risk more than ANY other build out there just to participate in general pvp, imagine how the risk/reward ratio would be inbalanced due to such a nerf.
Merc leaders risk over 300k caps worth when using mutie squads (ofc only when buying RL muties, but equipment/amountofammo as well) and somewhere around 30k-50k when using other pvp worthy squads.
besides that, BG mercs are the only real problem, every other follower would be COMPLETELY obselete with this nerf.
A possible solution may be
When you buy new mercs they will have low level, green rookie (eg 5) so if you dont waste some time to level up they will be not very useful , so when your mercs is killed then you will have waste some time for level up the new one .
Why do you think people dont level their mercs up right now? Because its not worth it at all, to grind up a follower, and have him instant killed without any use in some random encounter or by another player
. when player dies, he only loses stuff, when merc dies, player loses caps, time, equipment, people will say "Well so do i" But thats not entirely true, because other builds do not use all three of these at once, those builds can buy with caps, saving them time, when a one of you player crafts it, you lose time, but not caps, etc.