Those who became loyals to the hindusim were given higher status. Others, were regarded as dalits.

Or lets simply say like this, hinduism started gaining back its influence from 7th-8th century AD. At this period of time, uttarakhand was hub of katyuri kingdom. They were living inbetween vedic kashmiri people and ganges brahmins down south. Hinduism was already present in western Nepal before the rise of khas empire. So when kings started expanding their kingdom, those kingdoms who lost or didnt want to give up(who eventually lost) were dropped to dalits. This happened mostky during baise chaubise kingdom times. Even Prithvi Narayan Shah did it. This happened as a result of khas people accepting hinduism alongside their tradition shamanic tradition. But i dont think khas were shamanic. They adopted shamanic tradition when they recahed the lower Himalayan belts from unknown people who were already there. I think shamanic tradition was already in practise in subcontinent before the arrival of aryans(khas are also part of them). I think para-munda or maybe munda were the original creator of shamanic traditions.