I played them on a huge map / expert and their mix of advantages/handicaps was ok for me and I think an ambitious (human) player will find an interesting and very different experience here. I enjoyed it.
I did not know about the growth-thing when I started the game...
The larger map also offered me an unexpected boost: Deorcnysse was my main pionier-supply. The chance to find it is higher when you have more wildlands in the game...I play with a high frequency of wild lands and dense monsters, so the chance to loot"human ressoruces" is better for the undead. Also in the end-game you can get more growth-boosts from the wildland-bosses.
Perhaps higher difficulty-levels offer an advantage: you can conquer very nice towns (concentrate on towns with essence and Tower of domination), and I was able to cast "Sovereigns Call", perhaps reloading fame-milestones / heroes is helpful... also the quest DLC pack offer some nice growth-buildings.
Their special traits for units are perfect for early wars even against stronger opponents...and to find volunteers for the graves...
Also the abilities that every hero gains are very nice: he can feed 3 hitpoints from any ally to gain 12 hitpoints.
Together with some overpowered (undying curse) units you have walking healing potions.
I think it is impossible to play them peaceful, but hey, they look like a rough Motorcycle Club from Hell, for me it was clear what to do...
The difference is perhaps, that you have to find a very good balance between going early to war when your opponents have not yet become too big and strong and on the other hand to find a way to conquer "nice" towns (with good infrastracture) that had some time to develop and to fight as many battles as possible to benefit from the ability to collect the dead souls.
Also their handicap offers a very nice effect: you can settle everywhere, you can ignore food, a 1/6 town can reach the highest level without supporter-towns (which are useless for you anyway) because you have better control over the limit, when you are able to generate growth you can build as many graves as you need. So they could create a more "focused" empire. Also this offers you the opportunity to concentrate on destroying the enemys science and military-infrastructure, because mainly you will need essence and you can benefit even from small cities with many materials.
I tried to save me some "Growth farms"in my game: Bandit-Camps, Syndicate-Forts etc., I did not loot them, so there was a constant rebirth of armies I could send to my graves.
I would not say no to any tweaks, but after my opinion against the KI the Dead play well when you handle them like they are: very different.
Some minor things are not fully consistent, for example that I have to build regular stables to gain dead horses, perhaps they should be able to "form" their horses out of anything, Crystals or mana perhaps? Or can ride dead animals (wolfs, wargs, etc.)?
On a small map when you start without essence and "human monsters" it could be less funny whit them...then it depends on how nice your neigbours towns are ?
I recommend it to experienced EFELH-players who are in search for challenge and more diversity in the way how fractions play.
On the other hand, when you have not played the "Children of Storm"-Mod, yet, you probably will find even more of this there.