Devolik
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1: There is a problem with the conversion. If units haven't been purchased in the town, they disappear when you convert it. Therefore, it makes sense to consider leaving the castle as it is if there's a large unpurchased unit pool, and rebuild it later.
2: Each subsequent castle costs more to convert. But in my opinion, it's still too cheap. I would prefer the conversion cost to be higher, especially when converting to your own faction. This would provide more opportunities to think strategically.