@Flexo: not sure why I can't reply to you, but...
I didn't play late L5R. I remember seeing some of the previews from the first set of the second cycle, but IIRC not all of the clan packs were out when I stopped. It does sound like things went...kind of the way I'd expected they'd go.
I get that the Fate system was designed to put practical constraints on board size and to prevent board stalls, which could be a problem in the first L5R. Also, it let them control the number of creatures in play without having to resort to the first game's system of having everyone in a losing combat die, which made seizing and maintaining a tempo lead absurdly important and, combined with province destruction, meant you were always one bad combat away from spiraling into an unwinnable situation.
FFG L5R's unwinnable situations felt like they snuck up on you a lot more often. You'd look at the board one turn and suddenly realize, "Wait a minute, I'm on seven fate but my opponent has banked thirteen
and they somehow have a better board position than I do...what?" IIRC Lion had that way worse than the other clans but there were a lot of micro decisions in every clan about fate management that could snowball into a situation where you were stuck almost permanently behind. In other words, it felt like Fate solved the problem of, "how do we cap army sizes without using total army destruction like in the prior game" but introduced a host of new problems and headaches. I think they maybe could have cracked that problem by having an RTS-style "food" cap, determined by your stronghold, where every guy cost a certain amount of food to keep around and you'd be able to free up food by dismissing guys on your turn or having them die to spells or effects.