What I'm saying is, these minor factions never joined the main factions before the update that changed mercenary behavior, so I'm not sure if it's intended or a bug that they started doing so.
As for whether they should, I liked it when they were doing their own thing and causing trouble for their main enemy factions. Was nice to have stuff going on like that below the kingdom vs. kingdom level. This makes them feel more generic to me.
I'd actually been putting a suggestion together to flesh these guys out with stuff like hideouts they drop their loot and prisoners at that you can interact with to buy their goods or hire their unique troops if you were friendly, or raid if you weren't.
They were also nice mod-game bullying targets as an independent, above normal bandits but not as dangerous as taking on a faction.
I think the changes after the update were generally an improvement. Seeing the minor factions hired as mercenaries actually gives them a bit of character and a wider role (rather than just being bigger and more valuable bandits wandering around in circles as mid-game targets (I made a lot of coin capturing Beni Zilal before I was given some cities, I assume they are some sort of rival monarchy given they have lots of those shiny Royal horse archers).
I like the idea of minor faction hideouts and hiring their special troops.
I agree the minor factions should get fleshed out more and should not be employed as mercenaries most of the time (unless the are described as a mercenary company).
Actually the minor factions, kingdoms, and kingdom clans all need fleshing out more and given more character. I would like to see grudges, rivalries, policy preferences and agendas for each clan and minor factions displayed more clearly in the encyclopedia. Whether a minor faction joins or is at peace with a kingdom could be linked to the kingdom’s current policies. The implementing the more peasant/citizen rights polices could then the a key factor in being able to recruit some of the minor ‘rebel’ factions with a peasant/citizen rights background e.g. “Brotherhood of the Woods”.
More policies, more interesting policies, and policies with greater impact would be good. ‘Tolerance for criminal organisations’ or ‘Hiring of mercenaries allowed’, 'Allow peace-time raiding (privateering)' or ‘Ruler decided by election’ could be Kingdom level polices with major and interesting implications.
Currently the factions, clans, companions, and policies are largely bland and interchangeable. Hopefully it is currently just the bare-bones skeleton
where the flesh, character and depth will get added later.