Hi
Hmmm...........
I think my way of interpretating is easier but not nessecarily correct as rules are written ?

The advantage of Army Baggage is that it is grouped in a Cmd that is hopefully not likely to be attacked and can be in a fortified Camp, but yet gives a Morale Boost to each contibuting Cmd (ie the troops are bouyed by fact their baggage is 'safe'). I still think it loss (as a Cmd) would affect every Cmd ie a -3ME usually
Placing Baggage directly with individual Cmds gives a greater Morale boost (4ME rather than 3) but the baggage is more vulnerable as its within each Cmds 'rectangle' and its loss is of course just as potentially serious. Flip side is it only effects a single Cmd compared with loss of Army Baggage.
Otherwise as Toby says you would have to keep 2 ME records per Cmd which seems tad odd.
In my 'method' once you lose the Army Baggage in its entirety with (assuming 3 Cmds worth) each Cmd suffering a -3ME loss and the Army overall counting -12ME. But if the Army Baggage is only damaged but not broken then the CMds suffer no ME hit and Army overall onlt the individual base loss/es. Unusual for this to happen I suspect unless you have BgF which gets hit but then 'runs' away.
This is similar then to 3 Cmds with 2 pieces of Baggage attached all losing said baggage working out as -4ME per CMd and -12ME to Army.
This is of course serious losses but then surely thats the point ?
Of course Baggage is no longer compulsory so one does not need to field any but your overall Army ME size is thereby reduced, I like having the differing choices.
Of course using the Baggage Cmd as a PIP 'dump' is another choice for some armies
Cheers
Gary