Good point you have here indeed. I include some permadeath in my mind because I feel like Karlach is written to be tragic in some way, like someone terminally ill. So as the quality of her quest cannot beat Shadowheart's one overall, succeed to have a happy end (or a living end) needs to be more like a russian roulette. Something really risky all the time, very hard to obtain but so satisfying if successful.




For the "The return to avernus end would be basically gone" part. I partially agree, as it will be weird to have her saying "it's too late" if you start building a new heart but don't finish it. But for example with Lae'zel, I let the Emperor eat Orpheus brain without launching the Voss+Hammer quest final step to avoid the dilemma about freeing Orpheus or not. If I had Lae'zel in my party at this moment, she would definitely have left the group. But instead I play it without her. So at the final scene she was not angry at me, she just say something like "I turned my back on my queen and my entire race, they'll never forgive me and will hunt me everywhere, what will I become now?", and you still can convince her to stay with you (yet she doesn't come with you in Avernus anyway which is another weird sequence of decisions). About Karlach it should not block the return to Avernus way if you let her quest as is, be it will sound really weird. And if you totally ignore the quest, well that's the actual "best" end we have so it's cool, nothing change.

Anyway, I find your idea much better about Dammon, so you really have to save at least 2 gondians to have a good end. It's more coherent, even if I was proud about the idea to have a malus, like it's a happy end for her but not that much good for you as a player & the gondians.

I would love to have an Avernus DLC, but I keep in mind they announce it is not part of their future plans, so I tried to put a lot of ideas without adding a place, adding characters, deleting existing cinematics or something. Only using what we already have in game.
Plus I find it full of symbolism, the fact that those who are oppressed by her worst enemy are the only ones who can save her, and to be saved she have to let the great achievement of her worst enemy (the Steel Watcher) staying alive. Oh the irony it could be in both way.