1. Use the Chaos/Neutral/Order System as a rule set, not as a game fiction.
Make it rules of engagement for alliances and guilds so when you join a guild or alliance-faction you are put into a rule set. The Order rule set will allow for the Trammel communities to ban together and do champs, PvP, factions and roleplay. This has nothing to do with Lore, it has to due with controlling the abusive behavior of people who exploit the current system.
Example: Only Order would have a no kill, no steal, rule set. The other two would allow griefers that can't handle Trammel, cause they are not able to gank the weak. Who cares what lore is used. The system is needed for growth.
2. Trammel is Trammel, Fel is Fel, Factions stay in Fel. Expand Fel, maybe, Change Fel, maybe, Expand Factions to dungeons. Factions need to be contained and seperate from Trammel.
3. Trammel is better than Fel right now because of power, greed and griefers. Allow this to grow and Trammel will also diminish.
4. Faction skill loss is a waste of time. There are not enough ways to get silver.
5. Took them how long to make what one good change. This is just way off topic, can't be done. Tram has to have its' own rules. Don't interfere with the rules to satisfy another.
There is nothing good said about how to fix the problems, no ideas. The idea is a good one. It's the way you see it being put in that is skewd in my opinion. Who cares where we fight. The issue is no one plays factions.
Factions has to be made more fun and new challenges have to be added. What happens in Fel stays in Fel.
The idea of people going into Fel and earning faction items should be ok with everyone because they are earned. When your level diminishes, the level item should become unwearable or useable.
But, any item earned in the game should be able to be used anywhere, that includes Trammel.