Yes it does work for npc's

Does this effect npcs?

Hate to ask but would it be possible to make a version of this with:
> Instant Level 40 Lords and Heroes and 4x skillpoints
> Only applies to legendary lords and legendary heroes (like Lord Kroak)
> (applies to AI as it already does)
> no skillpoint dump (which is the setting you've already got) because the AI will always waste points on it.

This would make the late game more interesting because playable factions would be more likely to survive and become powerful without needing to confederate.