A comment on general game-play..
I see a problem with this that relates to its general appeal as a game mechanic.
This has primarily been a "Good vs Evil" game. The player, to find out which Civ's are "Good" and which are "Evil" often doesn't have to go further than looking at the leader's pictures. As simplistic as it sounds, that is generally a "Good Thing ."
In order to play a Civilization of their choosing, the Player doesn't have to know the lore. They don't have to read a history book and they don't really have to read more than a Leader's card to know if that Civ is generally good, evil, a builder, a warrior, a negotiator, etc..
This simple game element is very important. Many games are based around it, even though it may not be immediately apparent to some. Good vs Evil is, in fact, one of the most common conflict elements in human history. It is found in almost every facet of human interaction. Sometimes, it devolves into "We are Good. They are Evil." But, more often than not, one can define certain moral truths that can reveal the answer to such questions.
But, in game reality, the player often decides to play either Good or Evil, right out of the box. This game element allows the player a firm foundation for a perspective from which to create their fictional game world experience inside the game. Most great games that deal with interactions between dissimilar sides have this element included, somewhere, within the game mechanics or plastered in very large words in the description of the game's setting.
Here, I think what is being done is not improving a game element, but reducing its effectiveness in regards to player appeal. In essence, it is being "watered down."
Like it or not, while attempting to mimic the "greys" of moral choices in real life sounds neat, it doesn't always work very well in a game. Most games can be thought of as Fairy Tales, with certain distinct memes that influence their appeal. One of the highest of those is "Good Versus Evil." Mess with that and you risk unsettling the game board that happens to be based on it.
Is there an alternative? Certainly! You can still have your cake and eat it too. You can still have all the dynamic alignments you want, without unsettling the board or detracting from the allure of a Good vs Evil conflict setting. That part is very easy and simple - You just don't describe the new mechanics you are introducing as heavily influencing the "Good or Evil" of a chosen side.
Perception is reality, especially in the limited world of a game. IMO, in order to "work" as a popularly appealing game, RiFE still needs to retain a very definite Good vs Evil setting. That is what FFH is built on. That is what the entire storyline is perceived as being derived from. Even the Civs, their units and even their buildings are sharply defined and contrasted with Good and Evil. This is a Good versus Evil game. There isn't any room for much of a Grey area in the defined setting. In fact, Neutrals sharply contrast with the Good vs Evil aspect of this game, making being Neutral into something extremely unique and extremely appealing, rather than the usually humdrum definition of.. neutral. Being Neutral is "tantalizing" in such a setting. For the above reasons, amongst many others, FFH (and RiFE) works extremely well in generating gaming appeal.
Whatever you end up with, you must continue the facade of producing a Good vs Evil setting in a game. If you don't, you will lose appeal, limiting increasing appeal solely to existing fans of the game backstory. And, that will fade as lines become less distinct. Ambiguity is never an asset.
Instead of Good or Evil, you need to focus on making the social aspects of Lawful, Chaotic or Neutral a bit more dynamic and, possibly, introduce a third alignment element. That is not to say that Good or Evil can not change with a Civ. No, the danger of a possible alignment shift is a great gaming asset. BUT, that should be only from the perspective of losing a positive, never gaining a negative. If an Evil Civ shifts to Good, they must lose a positive, such as an ability they gained as being Evil. This is intrinsic to game-play where dissimilar sides are chosen at the start and it does work very well in helping to keep the player "In Character" so they can experience the full setting of the game.
In essence, a new player needs to be able to familiarize themselves with the game setting very quickly. Regular players need the comfort of expectations when choosing sides, but the drama of being able to forge a new gaming experience when they play. A Good vs Evil vs Neutral setting, like FFH/RiFE provides for both while adding factions, religious choices, civics, leader attributes, specials and the like, provides for the latter. If you're going to make improvements to the gaming experience for the latter group (existing fans) then you shouldn't take away from the gaming experience for new players at the same time. That is a Bad Thing . There is plenty of room for the introduction of factions, cults and even alignments that doesn't heavily touch on the "Good vs Evil" foundations of the game setting.