As both are not mutually exclusive by nature (unlike being Lucky/Unlucky, pretty/ugly), I don't favor them to be mutually exclusive.
Regal: +10% in Diplomacy, costs 1 point.
Distrusted: -30% in Diplomacy, gives 2 points.
Weaknesses/flaws should be really that and not just "free points for the min/maxer". Hell, in Legend of the Five Rings, the disadvantage of "Dark Secret" goes from 5 points (lots of trouble is discovered but could survive) to 10 (dead man walking). Considering that Elemental isn't an RPG (with a Master to enforce roleplaying those "little" details), the "pnushment" factor should be a bit higher. And it's not like the player that won't care about Diplomacy in his game, isn't going to get free points anyways with Distrusted.