It would be very easy to make campaign-only factions if ever needed, so there's no need to make a brand new system of sub-factions based solely on that fear.
However, the idea of sub-factions and branching factions, etc., has been around for a long long time. Certainly since the inception of the game back in the early 2000s. The original game design had the Greeks sub-dividing similarly to how you propose, but only in a very limited and frankly limiting sense. That's why it was decided to split the Hellenes into Athenians, Spartans, and Macedonians. I'm glad that happened.
Now, to the proposal itself, it's not bad. I've wanted an Age of Mythology-style choice Ui for quite some time.
The only problem is what's next in P3? Choosing a political system might be a good idea. Democracy (or Demarchy as I believe its proponents would have called it), Monarchy, Oligarchy, what else?
One thing I like about this proposal as opposed to other sub-faction proposals, is that it leaves the Spartans and Athenians intact. The hang up I have is its additional complexity (I like complexity, but the multiplayer crowd prefers simplicity) and the UI coding.