The entire unit is lost.

TBH I disband a lot. If you disband you lose the entire unit, as opposed to trying the gen for treason or frying him as a heretic or assassinating him, where you keep the unit but lose the gen.

If you want to keep the gen alive, drop an emissary to remove any titles. If he's disloyal, but him in the King's stack.

If the gen is a 5 star peasant (or other unit without appeal) then simply disband.

When you say he is disloyal, does he have a vice or just low loyalty? If he is worth keeping maybe you can get his loyalty up a little with titles or perhaps, give him your little girl's hand.

ichi