So, this has happened a few times now, both in LH as well as in FE.
I created a custom faction, and of course with accompanying custom Sovereign, a few games ago. I always let the AI pick the factions randomly each game.
Well, in my last couple of LH games, the AI has picked my custom faction as one of the other factions, which I am playing as well.
It does rename the faction and Sovereign, but essentially everything else is the same.
I just find this amusing... my twin sister (female Sov) is out to steal the world from me!