So I discovered that you will get the game over screen, even if you have an awakened animal remaining (that you could turn into a character, eventually).
Also, possession can be a useful last-ditch save, but it can also kill your sect. You get 300 rep and evil per cast. One of those, "Is this guy really worth the negative attention?" Still, nice to have, since you can't use it on your deathbed if you do not have it.
It also doesn't work once the Heavenly Tribulation has appeared. Or maybe it does, but you don't have time to get over to the new person. I'd also swear that the Heavenly tribulation came early.
When you go from a humanoid to an animal, that animal gets whatever possession brain problems you have, but they do not remain once you shapeshift. Kind of a reset, if you aren't at the comatose level.
Once your guys start falling to the map's demon, they'll keep trying to recover the wounded and get wounded themselves. Only solution I found was to kick the wounded out of the sect, then cancel the recover wounded order. Pretty much a total party wipe on that one. The one survivor wasn't able to hide from the next attack. I had some red ginsing to boost him to an Inner, but it was right next to the demon that was my previously tribuled bodysnatcher.
Well, the demon is still alive and kicking, so I guess I had some sort of legacy...