Sanctuary – “Crimson Tide” [Campaign 4 – Mission 3]

How do you reconvert Orcish towns? The button is inactive for me. And after capturing the first town, they said that the town should remain theirs :( As for the liberated Orcs, I included them in my army and then transferred them to an Orc hero; Irina only runs around with amphibians.

And another question. In the west, there are small islands with sunken ships; on one of them, there is a ghost knight. I talked to him, but no new quests were added, it seems. What was he even doing there?