RTF is a global modification that replaces all towns in the game.

Frankly, based on the cutscene we see when we decide to free the Overlord, it can be said that the son welcomed his father with open arms. He is unlikely to set any conditions for his release, let alone overthrow him and usurp power. So, we can initially show K'ha stepping onto the land of Ashan with an entourage of several legions of demons, but then something happens, and the demons are forced to postpone their attack on Ashan. I think that "something" could be the appearance of the Order of Void, which solves the problem of the pesky demons in a well-known way. The demons retreat to Sheo, and in addition to seeking revenge on all of Ashan, their goal will also be to take revenge on the Order of Void (we have three opposing sides: demons, voidwalkers, and the alliance). This way, we won't break the lore too much, and we'll create the necessary conditions.

In general, everything depends on the player's choice. In the Heroes 5 map for Dark Messiah, there are 2 endings, one of which is suitable. In the Dark Messiah game, there are 4 endings, and 2 of them are suitable. I believe that the "good" ending with Zana is the most logical.
1) Sareth himself says that he enjoys transforming into a demon. Personally, I see this as him accepting his true nature, and he is unlikely to repent.
2) Judging by Sareth's reaction to the entry in Arantir's diary, he is against the mass murder of innocent people, which means he will not release his father.

Because any sufficiently powerful mage can recognize the demon within Sareth, he will have to acquire guards. Demons would be perfect for this. By occupying a small territory, he can live peacefully and make plans for the future. However, power over the demons could corrupt Sareth, and he will turn into a cruel leader craving power.
(He can borrow the book of demon summoning from his teacher, Fenrig)