There's an EQ2 Forum thread
that makes a valid complaint that the way factions are displayed in the character window makes it awkward to check factions, because you have to know what category in the dropdown to select.
I'm thinking that maybe what's wanted is a stand-alone faction window in addition to the info in the Character window. Have the drop-down, but have an option to show all
factions. And in the "all factions" list, have a checkbox by each that would allow you to select one or more factions (perhaps as you are actually working on faction) and show only the selected ones.