...the size of European countries, so a handful of tiles in game.
Just one patch of complety unpopulated area between many others, add all the ones in the Sahara, Middle East, Central Asia, Australia, etc.
And that's roughly why I'm against making the distinction for the relatively limited amount of tiles it would involve on a map. Abstracting away the distinction between "food-empty but technically settlesble" and "no, really unsettleable" (especially as we humans are pretty good at ignoring "unsettleable" when we have enough motivation to do it).
From a game perspective, too, throwing unsettleable on top of impassable (also unsettleable as a result) take away still more real estste that's often already scarce on the map.
Throwing in a whole new terrain category (thus three terrain type) for "land you can't use" seems especially like taking a fair amount of resources for something that just sit there and do nothing in the game.
If the map was a globe I'd support that distinction more, because the Antarctic is the major case study for "no, really unsettleable", but until/unless such maps are implemented the Antarctic is best left off-map where it doesn't use up our scarce map tile space.
Mountains are impassable while deserts(proper) are passable but cant be settle, these are different limitations therefore need different strategies.
Ignore the role of these kind of limitations is lamentable both for gameplay and historical relevance, have a game were the "seas of sand" of the Sahara are the same as New Mexico is doing a poor work.
The number of usefull tiles is in one hand a performance issue, and in the other we have some others terrain types that are over represented:
- Mountains, have a relevant role but if you say "the size of European countries, so a handful of tiles in game" then there should be no place with more than one tile wide of mountains and many not more than one tile long.
- Wetlands, by surface most of real world wetlands are subartic the ones that are also barely populated and even that population is mainly from 20th century onwards, while true arid deserts have seen pass the trade routes and time to time armies of the oldest civilizations.
- Hills, these only make sense in size if they represent highlands. In a big scale their battle relevance could be covered by considering the movement between low and high lands by the attacking armies.
- Ocean, naval gameplay is mostly irrelevant and boring, at least in deserts land units could move with some attrition.
Then there is the exaggerated coverage by distritcs and infrastructures, the average game is full of medieval megalopolis so the sense of scale, change and strategy is lost in a continuos of continental settlements. If the bonus from proximity is more relevant the role of placement would be still significative without spam dozens of the same districts/infrastructure everywhere (quality not quantity) for a less tedious gameplay.