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.
Not true. If you only gain essence by questing or combat you HAVE to build a tank from hell. Otherwise eventually your Sovereign is going to die, but you have to use him in a combat/questing role in order to have a shot at winning the game. With them separated, should you choose to use him he will become stronger as an individual than a sovereign that is not in combat (not to mention you should be able to, in fact need to, use essence to buff stats, or on artifacts that buff stats, to make him stronger still so he doesn't die in the course of his fighting/adventuring)... but that sovereign that is not out fighting will be using his essence on things other than buffs to keep himself alive, but will also be a much lower level as a personal combatant.
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 order to become a godlike tank without getting yourself killed, you will need to expend essence on things/yourself to make sure you don't get killed. If you don't, you may not be required to, but your odds of survival would be significantly lower. Whereas an option for that sovereign staying at home is to expend all of his essence buffing his champions to equal you. Or improving his land to support a massive army.
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.
That assumes that your sovereign can become a supercombatant without buffing himself/artifacts with essence. That also assumes that the other sovereign who is staying at home hasn't buffed a number of champions with essence/artifacts, and that they do not now equal you in power. And thirdly, it assumes that the empire that has a huge territory and army because they focused essence upon improving the land in which they reside isn't able to swarm your supercombatants under with superior numbers of soldiers. And that the sovereign who is staying in his own city preparing world ending spells doesn't unleash said spells upon your nation. I think it should be really easy to balance out the "supercombatant" strategy, especially with essence de-linked from experience.