That already happens now though. Battle for Dazar'alor had people "change factions" when the story required it. It just seems silly to make a complex problem when simple solutions exist already. You don't need a group for most instances to be "one faction". The times where it made sense like Caverns of Time Blizzard already gave players an illusion.
There is no reason to over complicate this or have it be some big system. Just allow people to group. Put illusions on if needed for the few times Blizzard creates a faction/race specific story.
"Man is his own star. His acts are his angels, good or ill, While his fatal shadows walk silently beside him."-Rhyme of the Primeval Paradine AFC 54
You know a community is bad when moderators lock a thread because "...this isnt the place to talk about it either seeing as it will get trolled..."