Bringslite of Staalgard
Is it already the case that Allies can't Feud Allies?

I don't believe there are any restrictions, so any company can feud any other company. That could potentially cause some weirdness about how guards react when conflicted about who to support, but in general we want to allow we don't want to mechanically enforce things that are better dealt with by settlement/alliance leaders. If you like your companies fighting amongst themselves, let them go at it. If you don't, then boot them.

The only mechanical things we really want on that are the current one-hour minimum delay for starting feuds, and the incoming 48-hour delay before you can start capturing territory.

It allows companies to trade holdings through feuds.

While I was inactive a friendly force used a feud to take over my holding.
He who wrestles with us strengthens our nerves and sharpens our skill. Our antagonist is our helper.
-Edmund Burke