Why did my factory costs go up so much?
Lost a lot of land and infrastructure relative to the number of factories lost. More factories will built as well, most of which remain in Polish hands.
Also, that huge stability bonus to rebels in battles is a little OP since they get a huge bonus and the government gets a huge penalty. I know rebellions are supposed to suck, but that bonus for the rebels makes it near impossible for the government. After all, how likely is it that outnumbered paramilitary troops thoroughly rout, with very favorable casualty ratios, a larger and presumably better trained and equipped standing military (better trained and equipped by virtue of being an army and not rebelling from normal every day jobs)?
The government gets a huge penalty because governmental forces have extremely mixed loyalties. The Vanguards, however, did not get said penalty. The phrase "collapsing" to describe the stability of Poland wasn't a lighthearted description of the situation in Poland.
The army wasn't larger than the combined paramilitaries of the opposing side, and with the conflicting loyalties and general lack of cohesion in the officer corps on down in the Polish army, all the Polish army served to do was delay an even more costly Polish lost.
The paramilitaries aren't green boys off the farm. The paramilitaries largely recruit veterans of the Great War. Paramilitaries cost maintenance, and so are being paid and/or otherwise supplied. The Polish Republic, on account of its low stability compounded by the dozens of different nationalist groups and general weakness of the central government never was able to curb the availability of arms to the paramilitaries, especially in light of vast numbers of Great War weapons used by the Austro-Hungarian, Balkan, and Russian armies flowing around the country. The fact the number of combined paramilitary organizations operating in Poland outnumbered the 1924 Polish Army by 2:1 was a recipe for disaster that, at best, could've been delayed one more year before a civil war broke out.
For the record, had the paramilitaries had been doing something odd, such as crossing the border to attack German military positions, then yes, the paramilitaries would've faced a stiff penalty (the penalty the Polish government troops would've been facing). The other reason low stability helps paramilitaries within the country is because of widespread anti-government sentiment and the ease to hide, move, and fight amongst a somewhat friendly population.