your questions regarding the game rules (improving the interpretation).

Don't forget, if you upgrade fairies, the birds will almost never spawn. And upgrading fairies is very costly in terms of timer, and if you waste it in the first few days, you won't have enough on the second week. And what will you do without birds and timer for conflux on week 2?)

What do you mean almost never spawn? With air elementals built, the fairy upgrade will be done every time, as it costs next to nothing by itself. And upgraded fairies are definitely less costly on the timer than non-upgraded ones. Unless, of course, you're using them to chase down hordes of dendroids.
I played Flax twice in outlaw, and upgraded fairies both times. Once I had air elementals, the other time I played 8xm8a, where birds aren't even a consideration. Both times I just sent heroes in different directions — one hero with upgraded fairies one way, another hero with air elementals and a few non-upgraded fairies the other. So from day 112-113 you can fully, independently clear two directions. Other towns can only afford that with a fast capture of cons.
Anyway, you could run a little tournament just for Flax (we had one like that for Tower once), allow all upgrades there, and see what comes of it. Just preferably use the widest possible pool of templates.

I'm not against unbanning the upgrade for psychics, but the cost of such a unit is 800.
The non-upgraded one costs 750, damage 10-20, speed - 7.
The upgraded one costs 800, damage 15-25, speed - 9, magic immune.
If you raise the unit cost to 1200, you can allow the upgrade.

You always strive to make changes not to the game rules, but to the game itself. Maybe it's better to discount?

For intentional violation of rules, there should always be a technical loss! And the degree of guilt is determined by the judge.

How will we distinguish intentional from unintentional? Back in the day, there was a lot of this — late game, sod timer, accidentally casting a third Dimension Door (or a second on Jebus Cross), some unintentional hit-and-run — now almost all of this is blocked by the patch. Except perhaps for redraw and air control on panic and balance. No one does a redraw on purpose; everyone knows you can't do it. Does that mean we shouldn't punish it?

Actually, this is a very interesting question. I raised it some time ago, we discussed it, but never came to any conclusion.
If we differentiate violations into criminal and less serious (some punishable by technical defeat, others not), there will often be a temptation to commit a "minor" violation, thinking, "I'll get a warning, fine, but I'll win the game." To prevent this, a player must understand that breaking the rules results in losing the game.

It would be desirable to reach some conclusion on this matter. Here's an example from practice about a year ago, the match Chemist HP vs YaR in OFB-8, where a redraw was made, and it was established that the losses differed by a few imps, but the violator faced no punishment whatsoever. Even though the rules clearly cover this situation.

b) on blue's heroes or guarded mines, if the presence of growth can affect the outcome of the battle or the losses in battle for any of the players.

No comments followed back then, just as no clarifications were added to the rules about how many imps the difference must be for a redraw to count as a redraw. And perhaps a technical loss is indeed too harsh a punishment for a violation that doesn't affect the game's outcome, but there are plenty of situations where it's impossible to assess the impact on the outcome. But how, then, should such violations be punished? The options with a timer and skipping a turn are, of course, very interesting, but what to do if the violation is discovered after the saves are opened?