I've made a huge number of wooden shard turn-ins over the last two weeks on two characters, probably about 7000 in total, with the aim of getting access to Paineel without losing Erudin factions.
I found that repeatedly handing in 100 wooden shards and then killing one sentinel (guard) maintained the faction level. Looking here:
https://everquest.allakhazam.com/db/...tml?faction=17
suggests on live that killing a guard would be a -300 faction hit, and if handing in one wooden shard gives +3, then that matches my observations.
Given this was how Allakhazam says it is (was?) on live, it's likely not a bug if it does the same on P99.