I like the idea, but understand the concerns and the amount of work needed to be done for what seems to offer little benefit. I still think it's worthy, anything that can differentiate eras better is a win in my book.
Also I don't see an issue with backyard settling as long as the AI can defend it, and the AI should be smart enough to do that already. It shouldn't be that different than forward settling logic.
Edit: About camping on AI tiles: units on foreign tiles can be simply kicked out upon declaration of war, I think that's the default behavior with open borders right? Gamey, sure, but it's an established genre jank now and we already have it in game, so not a big deal for me. We can also have them suffer from attrition when they're kicked out (big penalty) or every turn spent on foreign tile (small). We already have the code for the latter, currently applies only on hostile tiles, can be easily modified for neutral ones. Making city and fort adjacent tiles impassable would also add more flavor to them.
Sure it needs a lot of testing and polishing* before implementation, so if anyone modmods it, you have one tester here.
*Probably we'd need to differentiate between passable and impassable tiles. A lighter shade of civ color could work, not sure if the UI allows it though. That's my main concern, have no idea how border rendering works, it may be one of the many visual elements we can't mod.