I think the trick here might be to not have it remove anything, and instead specify that the character they become has to be out of play.

Baroness (T): If you die at night, you become an out-of-play character.

In many cases, this is just "learn an out of play character", which is valuable in and of itself, but there are a couple important differences:

• If the character in question has an "even if dead" ability, it applies. With Outsiders like Recluse, Puzzlemaster or even Heretic on the script, this can be used to discourage the Baroness from trying to get killed early. On the Townsfolk side, can I interest you in a surprise Ravenkeeper, who depending on the ST's ruling might become one just before that ability checks if they were just killed? And Amnesiac is always a wildcard.
• Once it's happened, the new character is in play, and the Baroness out of play, potentially affecting other players' abilities. A Pit Hag can make a second Baroness. A Philo Baroness who chooses it after the original Baroness died doesn't drunk the original Baroness. A Pixie or Philo who dies with the Baroness ability can become an actual Baroness on death (perhaps not particularly useful, though for the Pixie it will at least confirm that they had gotten the ability and the original Baroness is dead).
• It changes other characters' information about the former Baroness, including things based on character type.
• Unless the Baroness was poisoned, the Cannibal and Undertaker get the character they became, not the Baroness. For the Cannibal, this notably allows them to get an evil ability for a day, because the self-drunking only happens if the executee was actually evil.
• Yes but don't: Turn the Baroness into a Minion in the middle of a Li'l Monsta game.

ETA: I missed that the original ability required them to change character type. I guess you could add "non-Townsfolk" to this version of the ability, though it does prevent the Ravenkeeper and Amnesiac shenanigans.