When you sacrifice creature which you recruited/bought yourself you gain erolin heat.

When you sacrifice creature which you received by CTC you don't gain erolin heat.

 

To my understanding Second rule was put in place in order to prevent mass loyalty farms from level 1 creatures.

 

When you sacrifice upgraded creature which you received by CTC, you still don't gain erolin heat, which I believe wasn't intended since you actually have to put in effort to upgrade it, which makes it impossible for above abuse. Creatures obtained by CTC who got upgraded (their level is higher than level 1) should give erolin heat.

What is the benefit of changing the game to how you describe?

 

I dont see a massive benefit here.

Is a massive benefit needed? It's just one of those things that make sense, it's a right thing to receive heat for a creature in which effort has been invested.

Upgrading doesnt require exploration points (I believe?). Therefore farms can still be made.

They do require EP. There is also age limit which prevents you from farming anything that way as well.

Age is not a valid restriction against the things this heat fix was implemented for.

This has been resolved.