Ok.
First, wow, Lots of death, glad It was just a test. Seriously, wow. Second, after the first test results, things do not look god for the separatists.
There are 3 branches of loyalty cascaders. 1. The Separatists, or those loyal only to the town, 2. The Loyalists, Only loyal to the Civ, and 3. Renegades, those loyal to none. I'm not sure how the original loyalist of separatists start, but it appears that after the first one, anyone who attacks them flips to their opposite i.e. a citizen attacks a loyalist, becomes separatist. The main problem with the citizen faction is if they attack any group other then renegade, they turn. AND, If a separatist or loyalist attacks a citizen, they become a renegade.
When there were 50 dwarves left, I paused and checked alliances. 1 loyalist, 2 separatists, 10 citizens, and 36 renegades. I attribute this to the way the original group of dwarves, who turned separatist after the attack, attacked the citizens, turning renegade. If only there was a way to divide the groups in half somehow, like maybe take a separatist, drop him in a room of citizens, and boom, Instant loyalists.
I will let the current simulation run its course before second test, any suggestions?
EDIT: Forgot to mention, animals always appear to stay loyal to the civ, not sure though, there were certainly alot of animal attacks later in the battle.
EDIT2: Yes, animals are always loyal. Also, Renegades take no orders from you, though they appear on the units screen as citizens. I gues that means no work can be done.