The entire idea of "main quest" in this game is worthy of a supreme facepalm. Doesn't matter what "main quest" is, what matters is that there is such a thing.
But, if we overlook the fact there is such a thing as a "main quest" and look at what it is... well... this is utter rubbish...
First of all, a piece of cloth is good enough to make you "the chosen one". How did you get that piece of cloth? Doesn't matter! You have The Piece of Cloth. Anyone who is you, the protagonist of the game, and has The Piece of Cloth is The One!
Second, if someone wants to proclaim sovereignty it should be allowed. The consequences should be there - laugh at the bunch of looters who say "We rule these lands", go teach a foolish enough player who stormed a castle and took it somehow that banditry is going to be punished. If you withstand the force that denies you sovereign status then others might see your legitimacy or bunch up and try to make the best of that opportunity and gain some land.
Third, it appears game really wants to point the player into "Kingdom" route which is something not everyone wants. What if I want to be a trader? What if I just wanna be a vassal and help some other kingdom take over without the use of my tailoring skills used only to patch three pieces of cloth together? What if I like having everyone fight and switch sides constantly to keep the balance of power and prolong the war between factions? Well, no, cus this is Mount&Blade2: Bonnerlard and you gotta lube that bone the way developers intended otherwise you are not playing the game properly.