Oh hang on. I think we are at cross-purposes here. 
I haven't experimented with levelling up using milestones. All I was pointing out was that the base stats for certain troops were inconsistent and that by upgrading these units you could milk a few extra hit points.
I just tried an experiement...
Uber Peon Mod File
where the default Kingdom peasant is replaced by an Uber Peon.
Code: xml
- <?xml version="1.0" encoding="utf-8"?>
- <UnitTypes>
- <!-- ********************** -->
- <!-- ** Kingdom_Peasant ** -->
- <!-- ********************** -->
- <UnitType InternalName="Kingdom_Soldier">
- <!-- base data-->
- <DisplayName>Uber Peon</DisplayName>
- <Description>A peasant armed with a crude cudgel.</Description>
- <CanBeDesigned>1</CanBeDesigned>
- <IsStartingUnitType>1</IsStartingUnitType>
- <!-- graphical data-->
- <ModelPath>Gfx\HKB\Units\K_Male_Mesh_01.hkb</ModelPath>
- <SkeletonPath>Gfx\HKB\Units\K_Male_Skeleton_01.hkb</SkeletonPath>
- <EyeTexture>gfx\Eyes\blinks\eyeblink_m1_brwn.png</EyeTexture>
- <Texture_Skin>K_Male_Default_Texture_01.png</Texture_Skin>
- <AnimationPack>SoldierAnimationPack</AnimationPack>
- <ClothPoseIndex>1</ClothPoseIndex>
- <InfoCardBackground>BG_GoodScene</InfoCardBackground>
- <UnitModelType>KingdomMale</UnitModelType>
- <!-- Sovereign Equipment Data -->
- <Equipment>Sovereign_Warrior_Hair</Equipment>
- <Equipment>Sovereign_Warrior_Shirt_Crappy_ID1</Equipment>
- <Equipment>GnarledClub</Equipment>
- <Equipment>K_Male_Head_01</Equipment>
- <!-- soundFX -->
- <MovingSFX>TEMP_KnightMarching1</MovingSFX>
- <Medallions InternalName="">
- <All>Peasant.png</All>
- </Medallions>
- <ProductionRequirement>
- <Type>Resource</Type>
- <Attribute>AvailableSpecialists</Attribute>
- <Value>1.0</Value>
- </ProductionRequirement>
- <!-- levels -->
- <LevelMilestone InternalName="L1">
- <Level>1</Level>
- <UnitStat_HitPoints>0</UnitStat_HitPoints>
- <UnitStat_Defense>0</UnitStat_Defense>
- <UnitStat_CombatSpeed>2</UnitStat_CombatSpeed>
- <UnitStat_Sight>3</UnitStat_Sight>
- <Intelligence>0</Intelligence>
- <UnitStat_Charisma>0</UnitStat_Charisma>
- <UnitStat_Constitution>5</UnitStat_Constitution>
- <UnitStat_Essence>0</UnitStat_Essence>
- <UnitStat_Experience>5</UnitStat_Experience>
- <UnitStat_ExpToNextLevel>20</UnitStat_ExpToNextLevel>
- </LevelMilestone>
- <LevelMilestone InternalName="L2">
- <Level>2</Level>
- <UnitStat_HitPoints>0</UnitStat_HitPoints>
- <UnitStat_Attack>10</UnitStat_Attack>
- <UnitStat_Defense>0</UnitStat_Defense>
- <UnitStat_CombatSpeed>2</UnitStat_CombatSpeed>
- <UnitStat_Sight>3</UnitStat_Sight>
- <Intelligence>0</Intelligence>
- <UnitStat_Charisma>0</UnitStat_Charisma>
- <UnitStat_Constitution>1500</UnitStat_Constitution>
- <UnitStat_Experience>15</UnitStat_Experience>
- <UnitStat_ExpToNextLevel>300</UnitStat_ExpToNextLevel>
- </LevelMilestone>
- </UnitType>
- </UnitTypes>
The unit should have had a massive HP boost once it reaches level 2 along with other changes but you're right, none of the LevelMilestone changes are working.
-------------------------------- EDIT ------------------------------
Just saw your new info. That would explain it. 