After player levels enough, no lord is able to regain his manpower after a crushing defeat. However, the infinite, size-unrestricted waves of bandits drive the lords away, preventing the lords from recruiting troops. The lord is expected to travel between the settlements to recruit his soldiers again. After a defeat and subsequent release from captivity, a lord is spawned on the world map as a party with a SINGLE member (the lord himself). However, the Bandit groups just spawn indefinitely scaling with the level of the player. The NPC lords recruit troops using the same mechanism as the player in Bannerlord. This is because the lords CANNOT recruit armies after a defeat.
However, you can notice that the size of the lord's parties never recovers to the initial level once all the factions begin to have extensive warfare. These armies usually size up to a few hundred men led by a couple of lords, and a kingdom initially starts with dozens of lords so they start with about a few thousand troops. You see, In Bannerlord, there are frequent large-sized battles, due to the new army mechanics (where multiple parties join to make a large army). However, I noticed that the factions never EVER recover its army size after a significant loss due to the battle. Mount and Blade II: Bannerlord was a good experience for me for the last couple of days, with all the improvements from the last game.