Honestly, I think all of the O49 RP since the Stirling was moved in should be retconned and give everyone involved a second chance to not make a total mess of it. Nobody planned for this story development, so it's no surprise it took us all off guard and we made a mess trying to hurry and accomodate all our various RP plans for it.
The invasion and annexation should've been pitched as the first step in an anti-Corsair campaign. It'd be an additional front in the Gallic war since Crete is allied with Gallia. Taking GC robs the Corsairs of a major food source and is a good way for Bretonia to put pressure on them. The Zoners should've been at best an afterthought.
Since that's not going to happen, though, we'll have to try to untangle things as we go. This event isn't going to do it, though. Bretonia might be an imperialist, expansionist power, but it's not into genocide or shooting refugee transports. I'm not opposed to doing something, but forcing Bretland to act out of character isn't it. I'd go back to the drawing board and coordinate with the Admiralty Board for an event that works for everyone.