Well, there is one mod that has xUPT already as an option (x meaning you set the unit limit) and it only counts combat units, not workers and settlers of course and ships can stack in cities still.
The AI doesn't look as if it has a problem handling it in game but it will send several stacks at you instead (several, being in some late game cases, being several dozen along a long frontline). Units still stack in cities however after built but can't be moved back in if it surpasses the limit.
Anyway, while I agree there's something fun about a small force of elite heroes defeating a large stack, there's probably something epic in the idea of an elite unit punching through a strong point of the enemy line by itself and, while not winning the war right there, helped immensely as my units start filling in the gap and surrounding the enemy army but the mod I play also uses Surround and Destroy which makes surrounding a unit or city give a bonus.
Then again, others prefer the SoD and I won't fault them since it does lead to that one, large scale battle that decided the future of your people in that one instance. However, setting the XUPT to 3 (like I do) or 20-50 (or lower or higher if you prefer) doesn't bug at the AI in the mod. It just makes wars longer as units fight in the field and the tactical advantages of terrain have to be overtaken from multiple angles.
It depends on FFH's AI. The maker of the xUPT system in the other mod made it optional and and didn't change the AI much to handle it and the AI has no problem beating you up at several points instead of one.
I would love to see this as an option in FfH or any modmod...
I believe that, according to my preferences, I would set limit at 10, but flexibility of this option is great. At least I would set it at 99 in order to avoid mega stacks