The LOP is an abstraction, but I think it is worthwhile. It forces you to protect your rear areas. I don't think this is exaggerated, except that I do think the effect should not be too significant unless a reasonably substantial force is threatening the LOP. It's relatively easy in the game for a cav unit or two to get behind enemy lines, sometimes they even rout in that direction, then rally, then head for the LOP.
But if a reasonably substantial force is in your rear areas, then yes, I think it should have a very substantial effect on the battle. This is historical and reasonable.