The average soldier has no idea of the big picture. who seem mostly motivated by the promise of riches (as per the prequel adventure). Not to mention monsters like Ogres, Giants, Wyverns, etc. In the chaos of battle, losing leadership would be devastating and half the army would be moving in old commands not even aware of the death while others might try to take command (contradictory orders abound), others would panic and try to escape or turn to looting, etc. Also, the chain of command would be severed. Azarr is the ultimate leader, yes, but the commander-in-chief is Kharn. To that end, with both massive figures of power, Abithriax and Kharn, dead the morale would plummet. There's a reason you win a game of chess if you capture the king - a medieval army would desert and flee at that point. The chain of command is inefficient (Hand has little in the sense of magical communication for example messages are most likely largely relayed by mounted messengers making for long response times), the morale depends on the leaders and figures of power, etc. It's worth remembering that this is for most intents and purposes a medieval army.