Registered to chip in.
While I'm certainly nowhere near "experienced user" of this mod (picked it up only a week ago), I'm getting the feeling that morale drain provides frustration for no good reason. While in theory its meaning of preventing camping sounds reasonable, in practice it all goes to "everything is circumstantial". The combat is HUGELY circumstantial in the early game (and to an inexperienced player), where your resources are quite limited and you are likely to make quite a few suboptimal moves due to lack of deep knowledge on how it all works together, you don't know which weaknesses your enemies have, and so on.
And eventually, morale drain leaves you in a lose-lose situation: you either risk and press on, only to (likely) overextend and get a hand killed (which will ALSO drain morale), or you sit out, only to someone lose it, panic, and run towards enemies (and get killed, and incur more morale drain).
In my particular example, I had a very first pogrom in a fresh 0.95 game (veteran difficulty), where map was laid out in such a way so that a huge enemy cluster occupied two two-story buildings in corner surrounded by open areas. So I employed smoke and run through to avoid snipers. Well okay, but there were quite a few close-combat guys around as well, and so they happily killed two of my hands, which, combined with natural morale drain, was exactly enough to send all my surviving crew in panic (apart from 80 bravery medic with terrible stats except for bravery). Eventually, the panic spiral led to me aborting mission with two survivors.
Not like I object to the fact that I couldn't beat the mission, I object to the fact that my loss was based almost entirely on "random circumstances" - map layout/enemy spawns, and the fact that my initial hands mostly had lower than average bravery (some 10s, a lot of 20-30s, one 50, one 80).
But as I played further, I also saw that it's also quite abusable for purposes of bravery training, where (after eventually making a high-bravery core crew) I could pick a 10-bravery person, put her through a couple of "training missions" (which mostly revolved around scouting general enemy dispositions and then doing nothing until weak-willed start panicking), and end up with respectable 40 or 50 bravery.
My impressions as a whole - while morale drain may have reached the target audience (I don't know, I tend to play fairly aggressively with or without morale drain) - it also creates a bunch of early-game situations where you lose "just because the game says so", not because you made lots of terrible mistakes or got yourself in a fight that's way above your current tech level. And as you progress through the game - it also becomes self-defeating, because morale drain also allows you to quickly train people to be resistant to it (though lame gamey exploitation of stat gain rules).
In the end, I opted to edit the rules, and remove all the morale drain from armors.
