The HP Balance feature does make the floatation physics behave more realistically. I removed all of the warship HP tweaks because I like the stock values, for whatever it is worth.
Earlier, I flooded a merchant using only the deck gun for the first time(Before, I could only deplete the HP+Big Hollywood Explosion
) and through careful shooting, I was able to disable the engines and destroy the propellor shaft, very epic indeed. The ship went down beautifully by the stern with a slight starboard list.
The way the fuel bunkers and cargo interact with the damage model in SH5 is amazing.