It shows the realm as deceitful and untrustworthy by those who it has made promises to and then reneged. It does not matter who the head of state is, the actions one one carry over to the next.
Not in Arcaean history. There's been precisely one change of Rulers that has had any degree of continuity, that of Dentara to Jenred. Every single other change of Rulers has resulted in massive, systemic, and drastic change in the realm. Dentara was elected as a rejection of Riar, and completely through over several of the things he had put into place, including a peace agreement he had reached with Sartania. And even the Dentara -> Jenred move made it clear that Jenred was going to continue Dentara's policies because he believed in them (he had helped shape many of them, after all), but that he was the King.
And, frankly, in Battlemaster this happens all the time. I personally think Jenred's Rulership would have weathered his decision to make peace with Arcachon if I hadn't paused and I had full time to devote to playing him properly, but it would certainly have been close and I doubt I would have pulled it off with the severely reduced activity I had at the time. Velax was specifically elected to (among other things) overturn Jenred's decision.
Indeed, if anyone should be labeled as deceitful in this instance, it should be Jenred, for making a promise to Arcachon that he wasn't sure he could keep.