To start, what do you mean by "outside entities" when it comes to the fae? Is it that there are actually creatures outside the Hollow in this Void which destroys everything since its absolute chaos, or do you mean the thoughts and alike or beings on neighboring planes? Though it wouldn't really come up in setting I am kind of curious.
The fae is a blanket term for Chaotic entities which act autonomously , as opposed to other Chaotic phenomenon such as a Reality Maelstrom. Chaos is the space between all space, and thus does interact with multiple planes (universes). Nothing naturally exists physically in Chaos, and everything that enters Chaos is almost certainly destroyed... but there destruction echoes across Chaos. These echoes may well manifest as something... stranger.
Normally, this echo results in a Reality Maelstrom which eliminates the inherent problem in a magnificent display of power rather quickly, or evaporates slowly over many years in the form of energy cascades. However, with the harvesting of Chaos for energy and materials, dead-zones are theorized to exist on Chaos where partially deconstructed entities or echos will pool. To this fissures in Reality may occur, resulting in the strange rock formations and environments created on the Borderlands of the Hollow. However, there are times where something horrific is produced. Enter the fae.
During the first year of the Hollow, as well as during the Dark Age, many people were lost to Chaos either in Reality Maelstroms, fissures, or Factory or Observatory accidents. Their echoes in Chaos are more dangerous than that of a anything inanimate or otherwise. From Chaos, their consciousnesses, and ever their souls', are deconstructed and reformed, often conglomerating and fusing into one another forming a Fae. Upon entering the Hollow, Reality, they manifest as horrifying monstrosities with enormous power beyond any normal being native to the Hollow.
Second, since this is chaos going kind of crazy on the outer edges of the world, as much as some of the effects create beings, there doesn't seem to be anything set up in system that would allow this specialized anti chaos unit deal with anything other than shooting/fighting it. What can they do with a reality maelstroms, or atmospheric disturbances, or anything they can't shoot and or kill?
To this question... I have no answer at the moment beyond shooting at it. I plan to implement equipment which rely on the character's Skills but not necessarily their monies to solve problems such as this. Like a portable Field Emitter or small Reality Engine. As well, larger problems may be solved with larger story set-pieces which will be written into the lore along with the Observatories and Factories. The characters exist to pursue rampant Fae and infiltrate hazardous, often Chaotic, environments. AS well, they hunt down threat beyond Chaos to the Hollow (political and public security stuff here).
Also, where exactly are the borderlands where these disturbances are happening? As I recall, the Hollow is an inward built sphere equadistance from the center. The observers are also evenly place, so there really isn't a edge to work with. Why aren't these anomalies appearing directly in the center of cities?
The Borderlands exist between each Observatory. That is, the border between each Nation. Thus, they exist opposite the axis the Observatories are located. The Observatories "fight back" or more correctly "dream away" Chaos. Ergo, the cities are MORE protected... they are not immune. The Observers themselves could wake up momentarily, Chaos would crash inward to the Nation at the center. OR a Factory could breach, spilling Chaos and those entities trapped inside into the city center possibly destroying its Observatory, thus destroying the Nation.
Now when it comes to current mechanics, as you mentioned, the class system feels tacked on.
Classes are gone. I like everything you said after that sentence, and I have thought of that (looking at Mass Effect as it did the same thing), but right now Specialization (Feat) Trees exist to create progression as well as the inherent progression from spending bp and Ore on new skills, powers, and equipment. Converting a Vidjah game into a Tabletop is difficult... whiiich is partially the reason this has turned into my own game and isn't simply a Mass Effect conversion (as it was before).
Thank you Chrono!