By the way, another feature appeared: when I captured the Elven town, the Elven hero disappeared somewhere(?). There was a fight with the garrison, and I captured the empty castle - the quest was completed....
My apologies! I was completely wrong about the first thing! Everything is great! It's just that no one said I did a good job - :)
After defeating all the demons in auto-battle, I loaded an earlier save, allowing me to continue playing as the Humans. It's definitely more enjoyable, BUT! I discovered the following unpleasant bug: I gained 70 reputation with the Orcs, but I still can't access the Orcish treasury... I suspect that I need to complete Crag's quest (?), but that means sacrificing 2 Human units, which I understand will be needed later for the Human quest "Gather Reinforcements"... Am I right? Or is that how it's supposed to be?
It seems that this doesn't help either. I don't understand anything: everything is done the same way, except for one thing - I didn't sacrifice the Orcish spy, but instead killed the Cyclops. But in the first version, I was allowed into Glavork's residence after reaching a reputation of 65...