So I did some tests replaying the same battle with different surgery values for my party, I know it's not a lot of data but this is something really noticeable in game, especially if someone is used to maxing surgery like me, at 14 considering the same base value as in native, survival rate should be 25 + 56 = 81%. Based on the results from my tests it doesn't seem to be working at all here:

surgery test

10+4 surgery all items in inventory
wounded/dead
3/7
4/10
1/13

10+4 surgery removed stat/skill altering items from inventory (elven amulet, light of galadriel, miruvor flask, finwarisil, smith hammer, saddle, horn of gondor)
wounded/dead
0/12
4/6
2/7

9+3 surgery
wounded/dead
1/6
1/8

7+2 surgery
wounded/dead
1/6
2/8

0 surgery 4 from Faniul
0/4
1/14

Can you please upload your savegame that you used for your test?

Hey, thanks for your reply! It happened on two different characters but I already deleted those saves and started another one.
In both runs I played mostly with companions only until level 20 so I didn't notice until the war started and I had normal troops. In both runs I never enabled the development menu, however I did export character, edited some stats and imported but all within normal values. Could that be the cause of the problem? I didn't think so since I usually do that on many mods. Anyway, on this third run I didn't import anything, going to test if that is the issue.

I found this line on last december patch notes, could it be related?
"Overwrite hardcoded surgery effect in battles, adding a base wound chance based on troop level"

Yes, it's probably related. Please do send me your savegame when you're able to reproduce the problem.

I'm glad someone else noticed this. It has been a looooong time since I've played this mod so obviously it's been through its iterations but I can't recall having this rough of a time taking casualties.

I've noticed this as well. For some reason, I also seem to have far greater deaths in battles compared to sieges. In battles with Mordor, my wounded to death ratio is around 1:2. I'm not sure if siege defenders use different weapons which affects kill rate, but in sieges with Mordor, the ratio is closer to 9:2. This is with 12 surgery and a similar army composition for battles and sieges.