Even if you honest to god think that Reeves is a very bad man and that the Xenos are a very bad faction, giving them officialdom would do nothing except make the community respect you lot a little more, especially since most people are in favor of XA's officialdom and believe that you lads have made a mistake.
Remember when some group of green admins made mistakes that everyone hated, but they still refused to revert them because they held all the power? And how all of that turned them into the most hated group of people on Discovery? Re-evaluating your choices and the reasoning behind your choices and then fixing a mistake isn't going to somehow take away all your precious power, it just shows that you are mature, level headed human beings that can sometimes make a mistake or two, and that's fine, as long as you own up to it.
If anything, XA not becoming official because "faction leader bad" will turn off everyone else who wants to make a faction, vanilla ID or otherwise. Unless, of course, they bow down low to the people in charge for a couple months.
At least that's how it looks like from my point of view. (pretty sure it's not just mine)