What you have stated is essentially how Impressive Title severs run! Unsurprisingly, many people have brought up the idea of making separate "servers" for FH as IT does, however it is important to differentiate between servers and the source. Feralheart, as of right now, is closed source, meaning no one has access to the source code besides KovuLDK. Meanwhile, the server is managed by Razmirz, giving him the ability to edit certain aspects of the game's online function and database.
Unfortunately, Kovu supposedly stated in the past that he does not want FH to be open source, so to gain access to the source code and make a completely separate Feralheart server could lead to legal issues. This is why the game rules includes that nit-bit about editing encrypted game files. Similarly, many people argue that if FH was open source, the fanbase would dissipate as there would be so many servers popping up with relatively little different from the original.