I vote for AR battles for vassals, to differentiate them from our main characters. It also adds tensions as we wouldn't be able to be in two places at once to fight our battles, and helps limit the tendency to think of multiple characters run by one person as being interchangeable.

As far as characters being switched to unowned I'd be inclined to be generous with time limits in cases where they haven't said they're leaving the game. If we were short on characters for new players to take I could see being stricter, but as is it seems less of an issue.