I'm fairly sure faction modifiers for race/class/deity are applied at character creation.
My reason for believing this as when basic faction modifiers for these factors get updated, they only seem to apply to new toons rolled, not to existing ones.
I also believe this ties in to the issue of treeform / minor illusion failing to make most factions indifferent (I suspect these spells removed race/class/deity modifiers on live).
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