I haven't really entirely read through this thread, but I have the distinct feeling this proposal is made for more personal gains than with the intent to improve gameplay. The assumption that "royals" create a toxic game situation is rather rash. Granted, some cling on to their status and their positions, but you should simply learn to deal with that IC. So far I have not had any problems with royals myself, except for the fact that indeed a royal duke is pretty much untouchable. Then again, in the end, most dukes are untouchable either way. To me the position of "duke" is still the best you can have in Battlemaster.
What I do understand is that a character, which gained royal status at say age 30, can be a duke for another 50 ingame years. That is indeed not the best situation. Players who do that have no sense of a continuous flow of new, fresh characters. You can consider such players selfish. It is selfish to stick to your duchy for several years IRL not giving anyone else the chance to take your place and have some fun - and probably enjoy it more, because old players tend to grow numb to positions they have had for a very long time.
My suggestion, instead of lifting "royal", is to enable death for old characters. In some cases even the limited hours that a character gets per turn is not enough to persuade people to kill their character off. Might as well be time to use some game-mechanic force then.
