Multiple problems.
First, detaching essence from level up nukes choice in what kind of character you're building. If you want to be a tank from hell, you go crazy on beefing the hell out of your character by physical stat boosts instead of essence. If you get essence separately, you've made no such sacrifice and no longer need to choose between them. This is bad. Building a character is only a meaningful task when you have to make hard choices between one aspect and another.
Second, while you become the godlike tank, you can give your essence to all those champions, building an armada of godlike tanks that can still use magic. You can also run around founding cities, while still having a godlike tank. More choice removed, you can always have a godlike tank for a sovereign.
In the end, the attempt to separate essence from leveling so that one can play a stay at home sovereign has backfired. You now inevitably have a godlike tank as it levels and by virtue of getting stomped into a greasy spot otherwise, must build and use that godlike tank in an offensive manner.
It's much better to change experience gain from being something only done through combat. If your city is getting bonuses for having the sovereign there, the sovereign should be getting experience for whatever activities he's doing to manage that. Casting spells, researching spells, managing the estate, a small bonus from empire wide combat accounting for strategic planning involved, perhaps even magical means of gaining experience through the combat of your summoned beings.
Assuming we can get them to change this evil plan to have your sovereign survive death on the battlefield to warp home, direct combat should be the most effective means of gaining experience due to the risk/reward factor of playing the front line. If they do go with such a wuss method it doesn't even deserve that as it's all reward and no risk.