I looked through the Lore forums and I didn't see anything addressing this. Just the fact that these new guards are annoying since they kick everyone.
I don't know why each faction has picked the area of Freeport that they did. I just know that since Lucan is gone (and no one knows where or why), the various factions that used to be outside the city proper are now "marking their new territory".
Well, at the end of the good-side series of quests introduced at the same time, Antonia Bayle ( ) is talking with a bunch of her cohorts, and planning on rescuing Lucan, if that helps you any. I know it is not what you asked, but...
This space for rent, much like the space between my big, pointy elven ears... :)