I can answer the second question - right now, factions can't be destroyed, due the family tree being removed. I think (but don't quote me on this) that Neph said that he's looking for a way for factions to be destroyed, but I think he also said that he likes persistent factions, because it means the player can watch the world turn even if they've been eliminated.
So to answer the question, if Malon is hired by KoH, and KoH loses everything, Malon will still ride around with her bow, shooting at anything enemy shaped.




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