I'd be in favour of being able to kill them if you also lost faction prestige as a result. Say their level / 2.
I would like there to be a % chance of champions coming to us and offering their services like Master of Magic or Master of Orion.
Me too. Not only champions, but squads of units too. When the Knights of Asok come to you, they could offer to join your cause for money, otherwise they attack. It could be based on prestige...
Another benefit would be that factions with the betrayer ability would still be able to attack some champions of the opposing side if they wanted...
Of any side, after all, they are betrayers.
I always plays as betrayers and natural leader so i can hire all champions and then steal their souls. This way i dont need to choose lots of magic traits at startup and get better traits at each level up.