I thought the movie was quite rubbish otherwise but one thing I liked about Gibson’s Passion of Christ was people talking in Latin and Arameic (with English subtitles of course). Similarly, I loved the way Tarantino played with language(s) in Inglorious basterds. Germans spoke German, French spoke French, English and Americans spoke English and then there was this hilarious Italian bit with Brad Pitt’s heavy American accent “bon giorno” and Christoph Waltz replying in perfectly fluent Italian. Even though the film had not even pretended to be realistic (which was part of the fun) this was still very enjoyable.
I would prefer modern Czech, German and Latin (well, there is probably no such thing as modern Latin…). I suppose there is going to be a Czech localization and a German one is also quite likely, so you could then simply mix those and add a little bit of Latin (that would be used only by a couple of priests at masses and not much otherwise anyway) and add an “accurate” localization option this way without too much additional expenses (the only expenses would be putting the language versions together and hiring someone, perhaps an actual priest, to come to the studio for a day and recite a couple of masses in latin).
Also this way you could work with details such as Henry not understanding what a Teutonic knight is trying to tell him or what the priest at a mass is actually saying while making that believeable. And I think that at least there should be a lot of latin texts around (if there are even going to be any books in the countryside apart from the bible in a church, after all this is still almost 50 years prior to the invention of the printing press) and only very few Czech ones.
Period Czech and German might be nice but noone would understand that today not even modern Czechs and Germans…and it would mean additional expenses atop of a “standard” localization (all in Czech, all in German, all in English,…).
Whatever you do please do not try to make up differences in languages by adding an accent. Nothing annoys me more in games (or films) than German (or Russian) characters talking in English with a silly German (or Russian) accent when it is clear from the scene that he is supposed to be talking in his own language and speaks English only so that the player (audience) understands it. Either ignore the language difference entirely or do it proplerly with Germans actually speaking German (I don’t think many people at the time could speak foreing languages…diplomats and clergy probably, but not a knight and especially not peasants so there would be very few occasions of a German actually trying to speak Czech or vice versa).