I was playing Oracle Caresa and was at war with Lord Reliad and Altar. I noticed the "Request Surrender" options in diplomacy so I pushed him hard enough to accept. Upon his surrender his remaining cities self razed themsleves and all his Heroes/armies quit but Lord Relias did join me as a Hero. He was also white box with teh red X frozen at start and I got him moving with Explore at first. Then took control later. He also wasnt on my scroll bar as one of my units. So a whole series of bugs here.

Once he joined new Heroes that could be paid to join on the map cost became negative. I assume with Relias in my team I get his Natural Leader abilty but they weren't just free but sold for negative. They were actually bugged and couldn't be recruited at all rather than join and give me gold on top. I imagine it's a combination of his zero price and some discount Caresa has that makes the price negative.

I guess it does make sence that you get the faction bonus from the vassal as that is on the leader. I just wonder if other such bonuses cause problem between faction mixes. Probobly not as all the other faction leader abilities are specific to the Hero while Natural Leader affects the unhired Heroes in game. An object on the map reather than the actual leaders' stats.  

Maybe a simple fix would be to remove any discounts factions get between them and if anyone vassalizes Lord Relias they just get Heroes that cost zero.