yes, it must be a very rare event! a circus system
a real wandering circus that places itself outside the fortress. Populated by mixed peoples
The dwarfs reset stress only during that time.
Yes the mayor/manager will decide if and how much to stay.
But there could be side effects (low percentage): an belonging to the circus is an enemy of a specific dwarf of the fortress (revenge, murder, poisoning, curses, sought by criminal organizations, payments for death...etc etc) evasion of ferocious animals or monsters etc
if in this time the fortress is invaded by goblin or titan, the members of the circus will be useless citizens of the fortress until they rebuild the equipment to leave (stress for the dwarf workers)
members of the fortress dwarves guilds (in the future) will be able to contact circus members to get their work done (murder, curses, create fake miracles to create new religions) etc.. generating retaliation or otherwise
I forgot the fortune tellers: they will drive the dwarves crazy by telling them their date of death
children who go to steal: commissioned thefts of used clothes, hair or blood pieces for voodo dolls ( for witches )
pagan evil, evil eye: the dwarf quickly ages and dies, diseases and so on
a way of killing and evade the authorities
if you refuse the circus, all the circus wanderers will hate you and when they pass in the area they will make teasing: free old wild animals or annoying pests etc etc..
someone remembers the Disney movie "Something Wicked This Way Comes" ?