no, it doesnt make sense. i QUIT service aka my contract with the swedes expired, hence im no longer in their employ, hence im not part of their army. thus making me a neutral party
that massive -40 drop in reputation shouldnt stay since its caused as a result of joining as a mercenary
if i'm no longer part of that faction. then that -40 rating shouldnt stay. it should be neutral, since im returning to neutral its how warband and the original did it.
if i became a vassal of sweden maybe the rating could stay, and it does for your rreputation with individual nobles but not the whole faction
but as a merc? it's just, bull. and it means im completely unable to join any of the other factions as mercenaries
it also really restricts me being able to gallivant around as a merc for different factions and very much limits my ability to grow my armies to mercenaries