The morale damage inflicted by the Spirit Leech spell will cause the enemy to rout earlier, nothing more. No damage is inflicted other than morale loss.

The only way morale comes back is when the company is not moving (doesn't matter whether it's in a zone of supply or not).

When you are engaged (i.e. your companies ZOC intersects with an enemies ZOC) you will ALWAYS lose morale.

Following actions/facts further influence morale :

- Companies composed of following front units never lose morale until the frontline is wiped out: zombies, skeletons, bone reavers, shades, shadow beasts, voids, death knights and disciples (the latter 2 is a guess, I don't have KAG).

- Killing an enemy unit increases morale.

- Losing a unit decreases morale.

- Losing the captain decreases morale A LOT (and it looks like it increases also the chances to rout, whatever the state of the morale). Note that if you retreat and the captain is dead, you will always rout instead. This is why (in general) it is better to have your captain in command mode. It also gives your company higher escape chances.

- Gaining health (i.e., heal spells) in combat increases morale.

Also, there are a lot of spell effects that affect morale behavior in combat.

Companies can regroup and gain morale simply by resting and not being engaged.

If camping units/companies/regiments in the wild is an option (to restore fatigue/morale), do they gain defensive bonuses if attacked?

Yes, there are different defensive states (entrenched, fortified) that companies go into once they have been camping for a while. This is indicated by the look of their banner. The longer they camp, the better the company's defensive value becomes.

How will you handle restoration of morale/fatigue to the U/C/R if they are attacked while camped and win/lose?

If your company wins that battle or the enemy company routs, your company will get a morale boost. However, just being in battle has its effect on morale and the extra loss of morale is brought about by lost units in the company.

Do U/C/R gain/lose morale based on adjacent U/C/R morale?

No. Each company's morale is independent of its surroundings.

If you comprise some units of low morale and some units of high morale into a company, is an average taken for morale or are the units affected individually?

Morale is handled at the company level. However the calculation of how morale is lost, is weighted heavily on the captain, then the front line then the support units.

Does terrain affect morale, and if so, does attacking or defending gain/lose morale for a U/C/R, perhaps based on race or faction mentality?

Terrain affects morale indirectly. If the terrain that your company is on provides you a defense bonus, you are likely to perform better in battle. As a result, your morale loss will be minimized.

How do captains affect morale of a U/C/R? Can you take a Cpt. with high leadership, task him to a low morale unit, and then win skirmishes with them to boost their morale?

With a very tough, experienced hero, a company is likely to perform much better than without, thus maintaining good morale. If you lose a hero/captain, your company does take a pretty significant blow to their morale.

Rallying & Routing:

How does the routing of one U/C/R affect the others under your command in battle?

When a company routs, it takes a morale hit and can't be given orders until it reaches its rally point and regroups.

Can you convert routed units of the enemy?

No.