Quite frankly your opinion on what the right and wrong ID is, isn't a requirement nor a consideration outlined by the rules provided for OF creation. The faction is Outcasts. if you want 0 diversity in how Outcasts are, that's a personal opinion and a bias against those pushing diversification of factions. In regards to how rebel factions operate, rebels are still "that faction" but fight against the mainline politics/military. The Outcast ID is absolutely the proper ID to do this on as they are Outcasts who utilize outside funding to wage their civil war. Your opinion as a player isn't valid as it's not a question of what you think of as a player, it's a question of did the faction meet the requirement for being made official at that time, which the answer was yes.
Personal opinions have no place in solid, non malleable guidelines of OF creation. The only guideline given is "faction performance is monitored both on the forums and on the server", a persons personal opinion isn't relevant to a factions performance, not how it conducts it's ability to operate. MR had filed OF creation as to extend their operating ability under their own umbrella while not trying to create a whole section of indies to support themselves, as the group is smaller and does not have the size that justifies an entire faction being created from it. The fact of the matter being, the only known requirement being met. There are no other requirements. The one given, was met.
If you want a different standard to how OFdom is granted, rewrite the creation rules to include specifics to be met, like "faction must follow lore without question" or whatever fits the bill of whats determined. As they were given, at the time of posting, the requirements known were met. Activity garners were met, like any other official faction. If you want to start holding existing OF's to the standard of "does this follow the lore of the original faction" you've got alot of OF's to review by your arbitrary standard. Because I guarantee not every OF follows their own lore to the letter. Infact sometimes going against it.