The original upgrades were very similar. The one with firebreath was preferred so we decided to make the second one a little slower and little tougher (more defense and HP) so it can be an alternative for Mages who want more endurance in their army.

Why had you decided change the idea of not-firebreath-upgrade rather than firebreath-upgrade?
The first upgrade of hounds had a good feature: they were fast enough to cross the battlefield in one turn without any special perks from hero ("tactics", for example). The second upgrade was slower, so it does require buff from hero perks. But second-upgrade hounds were much stronger with their abilities.
As I understand, in your mod the speed of the first upgrade is not so big now. Maybe, it's better to do in other way? You can make from the second upgrade even slower guy, but even stronger. And -- the fast first upgrade, that is useful in destroying neutral armies (especially shooters).