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The cost is 20 Reform and 50 Admin points, and the refunded amounts are 35 Reform and 50 ADM which obviously is not as intended.
I play with Xorme AI so there could be a conflict, theoretically. But I lack the skills to investigate and I also am not aware that Xorme would touch this part of the game.
Be prepared mentally and emotionally for the suffering, and keep an open mind to try new ideas and solutions. :) For instance, always try to get your spy network to 100% for a nice siege bonus. (The AI will do it, even if you don't. :) ) An unused diplomat is a waste that will be regretted.
I play exclusively with Xorme AI and Responsible blobbing and responsible warfare. I do not play without these mods any more.
The AI is improved and AI nations are significantly boosted in Xorme. So much so, that I always edit the static modifiers and tone it down a couple of notches, specifically the insane AE reduction and manpower recovery (both under the difficulty modifiers and the lucky nation modifiers).
I have found Quality (instead of Defensive) to be the bare minimum necessity to survive, and the combo with Innovative just brings you in the game against Poland, Brandenburg and nations with significant military bonuses, who are like terminators. Muscovy and Ottomans, the quintessential "quantity" nations fall 50% of the time by 1550. Mamluk often takes Quality+Innovative as their opener, while Otto takes Admin or Quantity...
Would it help the AI making better decisions in general and better decisions to avoid crumbling?
I read (and I may have interpreted it poorly) that government capacity and the size of a country are seperate. Does this then mean that a generic "large country" could collapse without the government capacity provided by national ideas, mission trees etcetera?