I think that mountain knights are in the game way to early. but I had no trouble defeating bandits that were not from the mountains.

Sea Raiders, with their new heavy cavalry, are positively nightmarish for a lower-leveled party to come across. So yes, I do definitely feel something has to be done to make bandit parties less intimidating; maybe cut down on the numbers of higher-end units in the parties, and make top-tier units very rare? Leveled spawns, as suggested elsewhere, are also a good idea.

With my next update I'm really having to nerf the bandits. I've notice that NPC lords are not that strong in later game because of the stronger bandtis.

Not sure if this goes under here. but i noticed looters spawned at any kind of bandit lair, like sea raider landings instead of just sea raiders. I found it kind of annoying because when I fight sea raiders I want to fight sea raiders, not looters.

@Andrew. I will look into this. I did not make any changes to where the bandits spawn. Could be something in Diplomacy.
Thanks.

Rupert Giles that is in Native too it wasn't added by any mods