I think the fundamental issue was that Lym was pretty hardcore loyal to the authorities even after it became clear they were bad guys. Like, she was keeping loyalty for the people hunting you... great trait for an XO.
I agree with you that she could literally get our people killed by not recognizing the danger that poses.
And I actually like that things like that are met with action and consequence in this story. Things like this are so disregarded in a lot of AVN writing where such consequences and conflicts never happen, even though they absolutely should.
Unironically better writing points in a game called "Oppai Odyssey" than in many others. Kind of sad that this effort gets recognized so little. Half the comments on the Lym demotion seem to not have even read everything properly.
I think I made a comment some time ago how this is finally an actual lasting conflict between characters and how that is a good thing for a story. A point in a story is not the bland slop we usually get and now it's not fine either