This happened the other day, while I was testing out the game for the first time.
The game had started to lag a bit (Probably from me being a noob by having multiple buildings being built, and having pathfinding and lua taking its toll).
However; during an invasion, I witnessed noticeable lag spikes / pauses whenever my footmen received damage, and the orange pixel splash appeared.
It didn’t happen when they blocked or dodged, which might indicate that the damage calculation and/or the splash effect takes a bit of processing power (On an already starting to lag game).
Dishing out damage to enemies was fine, just receiving it was a problem.