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In both world wars, battleship were deployed as convoy escorts, in order to deter enemy raiders. Is this modelled in the game? In other words, is there any point in assigning (old) capital ships to Trade Protection status?

Battleships will occasionally appear as convoy escorts. I don't recall ever placing a battleship on trade protection, so I am not sure if this will increase the chance that they will appear in escort missions, but even when in AF mode they will sometimes appear.

From game tios and my experience ingame, bigger TP ships are netter at fending off attacks. Destroyers only really fulfill the requirement, CLs and above actually repel enemies.