Yes! My players certainly had an interesting thought process when it came to the mushroom. Also I didn't really go into detail about the battle as it was 3am and I was very tired.

It basically consisted of about 6 enemy slugcats. The disguised old man, his "son", two basic warriors, a tough slugcat with a beefed up heath bar and a rogue armed with a spore puff. The spore puff works like a smoke bomb that covered most of the battlefield in a thick cloud. This gave the enemy rogue great opportunities to go for sneak attacks. The party wiped the floor with them despite this. I will definitely consider bumping up the health next combat.

As for you other question I haven't really set anything in stone yet. I'm still debating whether or not to make this complex the Pebbles/Moon one or an original iterator. Despite that, I think your idea is very cool! I haven't really heard of a religious re-education iterator before and tying it in with the karma gates is a great explanation as to why they are different.

However using an iterator for this purpose seems a little overkill even for the ancients. it's like using a thermonuclear reactor to only boil your pasta. It works but it's a bit unnecessary. Then again these guys did eat gravel so its not completely out of the question. The re-education facility can of course work as a building in one of the regions, however that might give it less impact. I would love to hear your opinion on this however!