Hi Ravenash,
While this is technically correct and in line with how all faction changes work (you can read more about it here), we agree that this quest warrants an exception and have made changes to allow progress to be kept through a faction change.
As for restoring lost progress that would still be an exception and up to the Game Master team to decide, though given this recent development I’d recommend following up in your most recent ticket if you don’t already have one open.