I think it's the nature of World PvP in MMOs. It's a game of cat and mouse; whoever has the numbers wins most battles. A lot of valuable goods are found in the PvP zones like the Northlands and Wildlands, reinforcing the idea of risk and reward. The economy revolves around rare goods that enhance the power of the individual player. The only way to get noble units is through ancient coins which are dropped from mobs in the Wildlands, and it involves the risk of getting attacked by other players. Also, the best armor can only be obtained through killing bosses in these zones. There are instances of clans which manage to lockout or gatekeep others from doing the bosses. For things so valuable, competition and conflict is inevitable. Feelings will get hurt, and people will one-up each other for many reasons, just like in real life and current politics.
Struggle is the ethos of the game: losing gear, losing units, losing time, rinse and repeat. All that's missing is territory control, so that the struggles are worth the troubles. There's only a limited amount of territory to control for a war-based game. PvP is not the kind of game that would appeal to every demographic, unless there are changes to the economy that PvE players could enjoy and be just as valuable in the game (farming food, cutting wood, mining metal, raising horses, etc.). See it as the symbiosis of PvP and PvE. One cannot exist without the other in an MMO. Otherwise, the PvP players would play on Taleworld's multiplayer, and the PvE players would play singleplayer.
The health of an MMO comes down to its community, but overall, the game's design is the crucial factor. If poorly designed, the game may end up fading away into obscurity like many other MMOs. It really is up to the Bannerlord Online team and their vision of the game. The conceptual basis and ideas are all great on paper. Implementing and seeing them in practice is a constant challenge; it's all a test and an on-going experiment to see what works and what doesn't.
The developers have been doing a great job so far as they have been listening to the community's feedback. The retreat mechanic and safe zones are one of many solutions that balances the power discrepancy between the weak and the strong. There's still a lot of work, but this game has a good future.