I'd say there is a fundamental SOD break here. The notion that Entity A (independent player) is supposedly part of Entity B (Rheinland Military) and yet has no authorization to do so from Entity B's leaders and chain of command and not being a part of Entity B's chain of command is illogical and immersion-breaking. It's like the LSF not being able to stop smugglers in New York when PVP was off.
I am in favour of total self consistency, and don't believe a military or police faction MUST create or enforce such regulation save if it is a unilaterally named one. If you would like to petition the administrators, as I have suggested before, to prohibit the creation or use of unilateral faction names, then go ahead.
With all due respect, calling something 'fascist' or 'unfair' or 'preposterous' is a subjective exclamatory adjective, not an argument backed by logic or evidence, which is what is used in debates.