The code is actually still in the game that powered this mechanic, so if someone wanted too they could make a mod where you switch sub factions in game, or any other sort of mechanic where you have to make a choice between one tech and other for the rest of the game.

That is true, but the devs could have simply made a new faction research tree. And modders can make existing ones bigger so it works out.

I still don't understand why they ended up not doing on the fly, because it doesn't seem very complicated to me. It doesn't seem like its a successor to Diplomacy at the moment, but since Steam got involved and the fact I really need a new computer, I haven't even tried it.