I am very curious on one thing. Are there any restrictions on the kinds of things you can author into the fiction via remembering?
Can you remember you are the actually the king of the gods just assuming human appearance?
Can you remember the King of the World owes you a favor that you want to call in now?
The most damaging thing about memory mechanics of the kind you describe is that they really can be used to add any detail to the world unless the game places arbitrary restrictions on the kinds of things that are possible to remember with them. And if any detail can be added then pretty much anything already established can altered to such a degree that it isn't really the same thing anymore. So this mechanic typically does get restricted in the types of fiction it can affect, even though it's exactly the same procedure to resolve any memory detail. To turn your argument back on you a bit, why are you okay with some things being rememerable and others not? It is after all the same exact procedure that produces both? Maybe this will help you understand how we answer the question you so often pose to us.
(1) Why would the sorts of limit you posit be
arbitrary if there function is to avoid
the most damaging thing?
(2) In the second of the two long-running RM campaigns I've mentioned upthread, one of the PCs was a fox who had taken on human form. Partway through the campaign, the PC remembered/discovered that he had really been a heavenly animal lord, exiled to earth. There are no mechanics for this sort of thing in RM, so it was resolved via player-GM negotiation. This didn't have any mechanical impact but did change the backstory quite a bit, in interesting ways.
The player presented this initially in the form of an in-game letter written by "Dying abbot dude, Temple for earnest desire for enlightenment, Yoa Maru branch" (this was the place where the fox-spirit had first gone when he took on human sentience, and the person who had cared for him):
Returning to full self awareness as an mature sophont a few scant months ago with only dim memories of his life or even existance before that (but retaining significant language skills, suggesting perhaps a scholar or poet in some previous existance) Hideyo seems to be the spirit of a wild fox reborn in a human (looking) body, allegedly by force of will. This theory under which this soul moved directly from animal state to the sometime thoughtful, sometime savage entity we know now has both strengths and weaknessed, and is probably not all true or all false. In support of this theory his physical aptitudes seem very similat to those one might expect from a creature whose animal spirit still remembers being both a killer and a thief. The skills for flight and hiding, but no distance stamina combined with a keenly developed sense for murder and ambush are very reminiscent of the wild fox. His self confessed cowrdice and fondness for stealth are likewise convincing aspects of an animal in human form.
On the other hand there are aspects of his development and behaviour which suggest this cannot be the whole story. As mentioned previously his language skills are well developed, moreso in the spirit tounge as spoken in the courts of the fae princes, but not spoken by ordinary foxes. His rapidly emerging chi powers, while not entirely at ods with the animan side of his nature are surprisingly well developed, and the social/influencing abilities seem to have few parallels in the animal kindom (but would be very usful in the torrid atmosphere of the spirit court. He has a rudimentary grasp of chi based buddhist healing medicince, allegedly gained at a monastry (perhaps where is slight undertanding of his own place in the cosmos was learned?) but once again this implies a significant ammount of time spent in man shape amonst men. Even more intriguing is this individuals essentially undeveloped ability to channel power from (presumably fox ancestor?) spirits. Is this some inherited trait, that he has been granted by his ancestors by virtue of his unusual heritage, or something learned in a phase of his existance of which he currently has no memory.
Added to this is the evidence of his endeniable (if somewhat unpricipled) social proficiency. Hideyo seems skilled at all forms of discourse and influence, displaying a familiarity with discussion, debate, argument and abuse which would seem entirely unnatual to have sprung forth fully
developed from the chi of the spirit of a solitary animal with no particularly well developed language. Both this aptitude for influencing people and his lack of compuntion in using such methods on innocent novices once again suggest to me that this creature spent some considerable time amongst a sophisticated court.
In conclusion, I belive the spirit known as Hideyo was at some time a functionary in one of the spirit courts (most likely an assasin in the
court of the Vulpine Pince). It seems clear that immediately before his current incaration he was living as a wild animal in the woods hereabouts, and slowly recovered his more human memories. Equally clearly sometime before that he was trained as a healer by those of the buddhist persuasion. Whether this was, as he believed, a short number of years previously between his initial birth as a natural fox and his current life is unclear. It is possible he was not born as a natural fox at all, but was raised in the spirit court and banished to live as a beast for some some crime or convenience. It may also be that his recallection is correct, and he did in fact raise himself on the wheel by sheer force on will, and then took a post in some palace or other, only to fall away to animal state again, either as a punisment as speculated above, or simply internally after some great shock or trauma. Nothing can be certain about this except there is more to this one than a simple spirit who honestly learned to be man shaped and lived in a forest and a temple, that just doisn't make any sense. Note also that none of these speculations explain his minor but unignorable ability to channel.
I fear I will be unable to investigate this phenomena further myself, my time grows near. Should Hideyo discover (in your mind) the truth about himself, and should he be (in your mind) a friend of our temple at that time, please show him this treatise, and forgive an old man's vanity in hoping he was at least close to the truth.
I don't know if this text ever came to light in play, but the ideas in it certainly were developed through play - mostly back-and-forth between player and GM in scene-framing and some consequence-narration.
Rolemaster ultimately is probably not the best system to handle this sort of thing, but we did OK. It certainly didn't break things in any way.
(3) In BW being King of the Gods would be a trait. So if it's not on your PC sheet then it's already established that you're not King of the Gods, or at least not evidently such. There are rules for adding traits, but they require a table vote and a good-faith vote is expected to be grounded in the shared fiction. So a revelation that a PC is really King of the Gods is not impossible but can't be done in quite the way you suggest.
(4) In BW being owed favours is reflected primarily via Circles and to a lesser extent Resources checks. There is also a Relationships mechanic. It's possible to have King of the World as a relationship, but that would be quite expensive in character building and otherwise would have to be built up via play. (A certain number of successful Circles check in relation to the same individual permits adding that person as a Relationship.)
(5) Upthread I think it was
@hawkeyefan who queried why, if we are expected to trust GMs with this stuff, we can't also be expected to trust players. Your examples seem to be intended as illustrations of game-breaking bad faith that is not grounded in the shared fiction. Which takes me back to my (1): I don't see why rules approaches that are intended to ensure that the game doesn't break, and to maximise the capacity of the game to reward good-faith, fiction-following play, should be described as
arbitrary.
EDIT:
When you say
the most damaging thing, what is your evidence for there being any such thing? Play experience? I don't think so. Others' play reports of difficulties they've had GMing Burning Wheel (or games with similar mechanics, eg MHRP/Cortex+ Heroic)? I haven't encountered these myself. Or is it just speculation on your part?