Hm. My initial thought was that maybe your A5 isn’t powerful enough. But Master of Magic only requires a 386SX, and even the 1st gen A5 would be perfectly capable of emulating this.
But that leads me to another idea: your cycle settings are definitely much too high, and that will cause slowdowns. As soon as the cpu becomes overloaded, emulation starts to lag. Also, constant strain on the cpu will cause heating, and then it will be throttled by cpu management. This is what’s most likely happening when it suddenly slows down a couple of minutes into the game.
To emulate a 386SX/25 MHz, you only need as little as ~3000-4000 cycles. So I’d suggest you reduce your settings instead of cranking them up ever further. Try something like 6000 for example, or maybe even 10000, then you can also set frameskip=0 to make it look smoother. Also, reduce memory to 4 or 8 MB, to match the system requirement better.