I also encountered this problem. Orc's Watch guards murder citizens and and Willow's Weep alchemist murdered her daughter (!!). I was also playing in a multiplayer team of two.
I even looked into the mod file factions (I hope you don't mind
) but everything looks OK.
I noticed that the problem ocasionally DOES NOT occur when we enter Orc's Watch for the first time (we had a saved game before entering), but even then revisiting the main town area starts the massacre.
Perhaps the problem is in the fact that we use Polish version of the game...?
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