I'm not sure it would screw up so much. It seems that it deters a lot of actions, but it doesn't really add all that much. The two main effects it appears to have is that most realms have outlawed looting and that after the inevitable brutal takeover, a couple players are stuck in the region for a week or two to fix it up.
Removing loyalty will reduce the time needed to take over multiple regions. That's a good thing if you're defending--and a bad thing if you're attacking. If you want to encourage realms to go on the offensive, then removing loyalty would probably help.
What is removing this going to do to the takeover types and court types (just court in particular)?
