Louis XXIV
Le Roi Soleil
Well no, but it could massively change gameplay. It means that while attacking, archers are invulnerable. I could see a case where an army being compromised of a double line of archers could do a very large amount of damage in the turn it attacks. Perhaps even enough damage for it to be able to withstand the counter attack of a melee army. I really think that combat in adjacent tiles should always leave the attacker the risk of being dealt some damage.
Well, you have to keep in mind that they're concentrating their attack on one unit. If that's the only unit around, it means a numbers advantage of somewhere between 3 and 6 to 1. Otherwise, the untouched units will counterattack, while the damaged unit heals.
As for not losing unit strength, I believe that's the case. Civ4 kinda combined HP and unit strength. A damaged unit will be weaker in the sense that, if it gets hit, it'll be more likely to die, but it's chances of hitting the opposing unit and doing damage remain the same.