Boots - In answer to your last question, yes. I have given all the Nobles the use of 1 military unit to protect the tile (you are also stationed to protect the city of Nar Shadda). I have covered the cost of the unit, the Noble will cover the upkeep (1 food, 1 shield) per turn (or as a whole, per t/c).
In reference to the begining, I assumed at the time of the writing that the Conflict Manager's ruling was correct. Octavian X claimed that you lost control of you last unit, so I gave you another. The tile you are caring for only has the resource to cover the upkeep for one unit. Therefore, if it is ruled that you still have your last one, your new one will be taken back and your tile (my tile) will cover the upkeep of your unit. (BTW Octavian, if it unfolds this way, I will only require 39 Legions, not 40.)