I'll try to avoid chiming in too much on the specifics of the IC and/or OOC reasoning, as I'm rather far removed from the specifics, but I would be hesitant about punishing someone for an attempt to liven up the game. Obviously a broken rule is a broken rule and must be dealt with, but I've often seen (and done myself) IC actions done for the sake of a better playing environment and don't think that should be discouraged. I would hope players would also keep it within IC sensibility in not breaking their character's style either.
I think a key element is that FR is continuing as a realm, however much diminished. There is no movement of nobility leaving Golden Farrow to join Asylon and reconquer GF, as you would seen in a merger that wasn't also a bug exploit. Asylon had two choices for interacting with GF without merging. Conquer it in a war based on various grievances between farronite nobility and those who left for Asylon. Or ignore it. They're taking the latter route.
I am inclined to agree with you at the moment. An argument could be made that in some cases a move like this one would be a true realm merger, but I just don't see the intent here, not really.
