In the current version (this presently being the latter part of 2017) "Heroes of Might and Magic II Ironfist version 0.1" we checked whether or not genies halve when it is strategically unwise. To check this we did the following.
In an offline ironfist compilation we adjusted the halving function such that genies had the halving option 100% of the time. No other changes were made. We ran two sets of experiments. The two sets of experiments were repeated a minimum of five times (perhaps as many as 7 times as counting wasn't strict).
In one set of experiments 5 genie troops were arranged from strongest to weakest and in the other set of experiments the same 5 genie troops were arranged from weakest to strongest.
In each of the 2 sets the genies engaged 3 times. That is 6 total engagements. The 6 total engagements were done 5 times (or more) which is 30 engagements in all. Although the engagements can move fast the genies appeared to only halve when it was the best strategic decision. We have 2 nice mp4 videos that each of the 6 unique arrangements. It is plain in the videos that in borderline cases the genies only halve when it is to the players advantage.
This is the listing of the 3 types of
1) Weak peasants
2) Strong peasants
3) Strong Dragons
I each of the 3 cases the genies were always observed to make the best decision.
The first engagement was against weak peasants and the genies never halved which is the best strategic decision.
The second engagement was against strong peasants and the genies halved until the peasants were sufficiently weakened. Once the peasants were weakened the peasants polished them off in a single blow. It was sad but the genies again always made the best strategic decision.
The third engagement was against strong dragons and the genies halved only until the dragons were sufficiently weakened. Once again the genies polished off the weak dragons in a single blow. Maybe not as sad as the polishing off the peasants but again the genies demonstrated that they always made the best strategic decision.
We may revisit this question of whether or not genies always make the best decision but for now we think the genies will seldom if ever exasperate a player by halving weak troops instead of polishing them off.