Can the attacking player split the 2 damage from a recruit among both defending units when Imperial Decree is in play, since it makes 1 damage lethal?

Ruling: No, Imperial Decree does not change how damage is assigned. You must still apply damage equal to a unit's might before moving on to assign damage to another unit.

Nuances:

• Imperial Decree doesn't change what counts as "lethal damage" for assignment purposes
• Imperial Decree only has delayed triggers that kill units that were dealt damage; it doesn't modify the damage assignment rules themselves